Pandemic effects: Do innovation activities of firms suffer from Long COVID?
基于德国企业样本，使用条件双重差分法识别新冠疫情对企业短期和中期创新支出的因果影响，发现受负面冲击的企业持续削减创新支出，呈现“长期新冠”效应，而数字化能力强的企业更具韧性。
The COVID-19 pandemic exogenously hit many economies early 2020. Exploiting treatment heterogeneity, we use a conditional difference-in-differences design to causally identify how COVID-19 impacted firms’ innovation spending in the short and medium term. Based on a representative sample of German firms, we find that firms that were strongly negatively treated by COVID-19 substantially reduced innovation spending not only in the first year of the pandemic (2020) but also in the two subsequent years, indicating ‘Long COVID’ effects on innovation. Firms with higher pre-treatment digital capabilities showed higher innovation resilience during the pandemic. Moreover, COVID-19 also led to a decrease in innovation spending in those firms that were positively treated by COVID-19 through an unexpected positive demand shock, presumably to increase production capacity. Overall, these short and medium-term innovation reactions have a substantial repercussion on the macro level. In 2020, innovation expenditure fell by 4.7% due to COVID-19. In 2022, innovation spending was even 5.4% lower compared to the counterfactual scenario without the pandemic. • Firms strongly negatively affected by COVID-19 substantially reduced innovation spending in the short run. • Negatively affected firms show Long COVID symptoms, with 2.3 and 0.9 percentage points lower innovation spending growth one and two years later. • Such medium-term effects were not seen in earlier economic crises, e.g. in 2008/2009. • Innovation spending of firms with high pre-pandemic digital capabilities has been more resilient. • Firms positively affected by COVID-19 cut innovation spending to boost short-term revenues and production. • At the macro level, the pandemic caused innovation spending to drop by 4.7 % in the short run, rising to 5.4 % after 3 post-outbreak years.