Asset modification for regional industrial restructuring in times of economic crisis

Contributing to the literature on regional industrial restructuring, this article presents findings on how firms modify assets to overcome an economic crisis. Empirically, this article draws on interviews with 33 firms in the oil and gas (O&G) industry in Southern Norway, which experienced a major crisis caused by a fall in global oil prices in 2014-2015. We investigate how the crisis affected the asset base of the local firms, how they modified their firm-level assets to restructure, and how and to what extent they drew on system-level assets to overcome the crisis. We find that the firms experienced a substantial asset drain. Asset reuse was the prevailing mode of asset modification in the early phase of the crisis, while asset bridging through collaboration with other organizations became more important in the later phase of the crisis. With exception of the local university, system-level assets were of little relevance to the firms. The study shows that during crises firms benefit from well-aligned firm- and system-level assets and from a regional industrial milieu that supports inter-organizational collaboration.