Disentangling the impact of different innovation types, financial constraints and geographic diversification on SMEs' export growth

Abstract

Innovation and exporting both play a vital role in the sustained business performance of small and medium-sized enterprises (SMEs). Unfortunately, few studies have simultaneously examined the effects of technological and non-technological innovations on SMEs' export growth while considering SMEs' financial constraints, let alone explicated the effects of a firm's geographic diversification on the marketing innovations–export growth relationship. To address these limitations, the authors theoretically ground their research model in the resource-based and dynamic capabilities views, and empirically test it using survey data from SMEs operating in Central and Eastern Europe (CEE). The results indicate the SMEs' export growth depends not merely on successful technological innovations, but also on organizational innovations that, along with product innovations, foster SMEs' marketing innovations. Further, financial constraints amplify the positive effect of organizational innovations on product innovations. Finally, the authors show that exporting SMEs benefit more from marketing innovation when they diversify geographically.