Innovation, Competitive Advantage and Export Performance: A Study of Pakistani Manufacturing SMEs

Abstract

This study examines the innovation practice as a key component to gain a competitive advantage to pursue export performance. Data were collected through questionnaires from 364 Pakistani manufacturing SMEs. Structural equation modeling (SEM) by operating Smart PLS-4 was used for data analysis. The findings showed that both directly and indirectly, innovation has a positive and significant impact on the export performance of SMEs in Pakistan. Additionally, competitive advantage has also been found as a mediator between innovation and export performance. The results signify an improvement in the firm’s innovation as well as sustaining competitive benefit so one can boost the export overall performance of Pakistani SMEs. This study is important to generate beneficial knowledge and insight regarding the appropriate and specific explanation for a firm’s CEOs/managers to enhance innovation along with maintaining a competitive advantage for the enhancement of the company's export performance particularly in the context of Pakistan. Consequently, this has a look at suggests a particular and beneficial avenue for companies to effectively improve innovation that is very important to gain a competitive edge for firms around the globe.