Innovation capabilities and performance: are they truly linked in SMEs?

Gonzalo Maldonado Guzmán · Jose Arturo Garza‐Reyes · Sandra Yesenia Pinzón Castro · Prof Vikas Kumar

150 citations0/0 files storedInternational Journal of Innovation Science

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Innovation and Knowledge Management Business Strategies and Innovation Firm Innovation and Growth

Abstract

Purpose In an environment where business uncertainty is the norm, developing innovation capability in an organisation is increasingly important. The purpose of this paper is to investigate the effects that innovation capabilities have on the business performance of small- and medium-sized enterprises (SMEs) within the context of a regional developing and emerging economy of Mexico, in this case, Aguascalientes. Design/methodology/approach The approach of this study is quantitative. Four research hypotheses were formulated and tested using structural equation modelling (SEM). Data were collected through a questionnaire survey responded by 308 SMEs located in the Aguascalientes state of Mexico. Findings The results obtained show that innovation in products, processes, marketing and management has a positive and significant effect on the business return of Mexican SMEs. Originality/value The paper complements the limited body of knowledge currently existent in the SMEs innovation literature, particularly when compared to that of large organisations. Similar works in other settings have provided mixed results in regards to the effects that innovation capabilities have on the business performance of SMEs. Thus, this paper offers a refined understanding and validation of the relationship between innovation capabilities and business performance, especially within the context of SMEs, and insights into some of the innovation aspects that managers may consider when formulating the strategies of their organisations. Finally, it enables such relationship to be understood within a particular situation, contributing in this manner to expand the body of knowledge in the innovation field.

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References

1981Evaluating Structural Equation Models with Unobservable Variables and Measurement Error 1988Structural equation modeling in practice: A review and recommended two-step approach.1997Dynamic capabilities and strategic management 1988On the Evaluation of Structural Equation Models 2007Confirmatory factor analysis for applied research 2000Dynamic capabilities: what are they?1991ORGANIZATIONAL INNOVATION: A META-ANALYSIS OF EFFECTS OF DETERMINANTS AND MODERATORS.2013Structural Equation Modeling With AMOS

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