Firm characteristics and capabilities that enable superior performance in recessions

•Integrative model analyzes firms’ success in recessions, relevant in Latin America.•Links entrepreneurship and improvisation literatures.•Survey data from Brazilian firms on the 2008–2009 global recession analyzed in PLS.•Propensity to recognize opportunities & improvisation capability raise performance.•Moderating effect of entrepreneurial orientation is also important. Recessions are recurring events in which most firms suffer severe impacts while others are affected less or may even prosper. Notwithstanding, strategic management scholars have made little progress in understanding the reasons for these differences in performance, particularly in unstable macroeconomic environments such as Latin America. In this study, we link literatures on entrepreneurship and improvisation to create an integrative model that indicates characteristics and capabilities that enable a firm to adapt successfully to the recessionary environment. We use survey data from Brazilian firms on the 2008–2009 global recession, and we find that the firms that have superior performance in recessions are those that had, before the recession, 1) a propensity to recognize opportunities and 2) improvisation capabilities for fast and creative actions. We also find a moderating effect of entrepreneurial orientation.