Post-crisis firm survival, business model changes, and learning: evidence from the Italian manufacturing industry

Company survival after recessions depends on the entrepreneurial ability of decision makers to react to the crisis and learn how to make the best use of chances. The aim of this paper is to shed light on the relationship between post-crisis firm survival, learning, and firm's entrepreneurial behavior measured by business model changes. Specifically, we test if firm survival after the 2009 recession has been affected by changes in the business model occurred in the period of recovery between the two recessions (2004-08), and if these changes are the result of deliberate reactions to the 2003 recession-i.e., learning hypothesis. The analysis of 67,241 Italian manufacturing firms suggests that business model changes have affected post-crisis firm survival by lowering the probability of default. However, the adoption of these default-reducing business model changes did not result to be significantly more frequent in firms that performed poorly during the 2003 crisis, thus providing weak support to the role of entrepreneurial learning in reducing defaults.