Abstract
It is widely acknowledged in the existing studies that innovation has the critical role in firms’ performances. Moreover, it has been acknowledged that innovative activities are the main sources of growth, survivability, and success for SMEs firms. In the setting of entrepreneurship, earlier studies have claimed that innovation is the integrated element of entrepreneurship. However, the existing studies have also revealed inconsistent findings regarding the impacts of innovation on firm’s performances under various contexts. Thus, this study claims that there should be a moderator to facilitate the relationship between innovations and firm’s performances. Therefore, this study has introduced the external integration as a moderator to improve the relationship between types of innovations and firm’s performances. The main objective of the study is to identify the relationship between various types of innovations including process innovation, product innovation, marketing innovation, and organizational innovations and business success operationalized with four dimensions including perceived financial performance, perceived non-financial performance, perceived business growth, and perceived performance relative to competitors) under the moderating role of external integration. Three theories namely Strategic Contingency Theory (SCT), Resource Dependence Theory (RDT), and Resource Based View (RBV) have been integrated to develop the proposed theoretical framework. The recent literature has been taken to gather the information about the variables that helped current study to develop a theoretical frame work and then eight propositions have been developed based on proposed theoretical framework. The external integration as a moderator between innovations and business success is the main theoretical contribution of this study. Furthermore, limitations have been stated at the end and recommendations have been made for future research.
Highlights
The key intention of any business is to attain the greater success in its respective sector
Based on above exiting studies, this study proposes the positive impact of process innovation on business success, P1: Process innovation positively impacts the business success of SMEs
Based on above exiting studies, this study proposes the positive impact of product innovation on business success, P2: Product innovation positively impacts the business success of SMEs
Summary
The key intention of any business is to attain the greater success in its respective sector. SMEs play a major role in improving the economic growth of any nation (Omar et al, 2018) Since both internal and external factors are accountable for the superior performances of firms (Tehseen & Sajilan, 2016). External integration has been considered as a vital external factor to achieve the superior firm’s performance sand has been considered as a key moderating variable between entrepreneurial competencies and SMEs’ business. The deep understanding of innovation (process, product, marketing, and organizational) for SMEs business success is still limited specially, no study has been conducted so far by considering the moderating role of external integration for the relationship between innovation and SMEs’ business success. This study identifies the role of innovation in the of SMEs business success under the moderating influence of external integration. The conclusion and future research are presented in the last section
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