Employment performance in times of crisis: A multilevel analysis of economic resilience in the German biotechnology industry

Abstract

Purpose

The purpose of this study is to elucidate the determinants of economic resilience at various levels of analysis. While the economic benefits of regional clustering are well-documented, the impact of external shocks on regional clusters has only recently gained attention. This study explores the antecedents of economic resilience, defined as sustained employment growth, prior to and during the global financial crisis within the German biotechnology industry.

Design/methodology/approach

This study combines multilevel linear regression analysis with egocentric network analysis. This allows us to distinguish micro- and context-level effects in the analysis of economic resilience.

Findings

The findings of this study indicate that while specialization at the network and context-level is conducive to firm growth prior to the crisis, these configurations seem to be particularly susceptible to external shocks. Conversely, diversity (diversified regional agglomerations and diverse networks) seems to be associated with economic resilience during the crisis. Moreover, we find that economic resilience is connected to adaptive capability at the micro-level, that is, the ability to expand and diversify a firms’ portfolio of network ties in the face of an external shock. Finally, we show that these adaptive processes are facilitated by geographical proximity among collaborating organizations.

Originality/value

This study contributes to the existing literature by showing that the antecedents of economic resilience are located at multiple levels of analysis. An important implication of this study is that the examination of the resilience of regional clusters may thus be significantly enhanced by disentangling effects at the firm, network and regional (i.e. context) level.

Citation

Kahl, J. and Hundt, C. (2015), "Employment performance in times of crisis: A multilevel analysis of economic resilience in the German biotechnology industry", Competitiveness Review, Vol. 25 No. 4, pp. 371-391. https://doi.org/10.1108/CR-12-2014-0038