Innovation in companies at a time of crisis: What is the role of R&D units and employment of academic researchers in business?

The paper explores how firms in a small open economy respond to the shock of Covid-19 crisis and provide evidence that firms engage with innovation activities substantiating the Schumpeter’s opportunity cost hypothesis. Then, the paper dives into the role of academic (and student) engagement and structuring the R&D into an internal organization and explores their impact on innovation intensity of firms in Bulgaria. The paper argues that academic engagement has the highest impact on process innovations, followed by product and marketing innovation.