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ABSTRACT In resource‐constrained environments, frugal innovation has emerged as an essential entrepreneurial strategy. It allows firms to develop efficient, affordable and sustainable solutions to meet the needs of low‐income consumer markets. This increasing demand necessitates a deeper understanding of the mechanisms that foster frugal innovation, particularly in emerging economies. Thus, this research aims to investigate the influence of network ties, resource bricolage, institutional support and organizational readiness to develop frugal innovation. For this purpose, a structured questionnaire was developed and data were collected through an online survey of 350 firms across Pakistan. The empirical testing was performed using partial least squares structural equation modelling for data analysis. The findings show that network ties have a positive influence on frugal innovation through significant mediation of resource bricolage. Institutional support and organizational readiness also positively moderate the relationship between resource bricolage and frugal innovation. These findings extend the frugal innovation literature by investigating the underlying mechanisms through which network ties and resource bricolage contribute to innovation outcomes under resource‐constrained environments. The study also advances theoretical perspectives of social network theory and resource‐based view. Moreover, the paper provides significant insights to entrepreneurs, practitioners and policymakers, which enable them to develop cost‐effective products and services under resource‐constrained markets to serve low‐income consumer markets.
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