Abstract: This paper provides evidence on whether innovation enhanced the resilience of publicly traded companies in the euro area during the COVID-19 pandemic. Using financial statements and stock prices of around 1,200 companies observed from the first week of 2019 to the last week of 2021, I find that companies reporting research and development expenses before the crisis induced by the pandemic were less likely to incur a loss due to its impact as well as recovered faster if having incurred a loss. In addition, I examine whether institutions and government policies played a role in fostering resilience. I find that the impact of innovation on resilience is greater in countries that had lower effective corporate tax rates during the pandemic and extended existing tax incentives to mitigate its impact.