Innovation, Digital Technologies, and Sales Growth During Exogenous Shocks

We investigate how the introduction of different types of innovation and the adoption of various digital technologies during exogenous shocks, influence firms' sales growth. By drawing from a sample of 1979 firms from the Caribbean small island developing states (SIDS) during the COVID-19 pandemic, we show that although some innovation types enhance sales growth, others are not as important and can even reduce revenue over time. Moreover, by examining the interrelationship between innovation and digital technologies we unveil situations where the simultaneous introduction of certain types of innovations with specific digital tools further enhances sales growth and other instances where rigidities arise that impair sales growth. This study furthers our understanding of whether and how innovation, digital technologies, and their interaction, enable firms to positively respond to the challenges of exogenous shocks.