Managing Knowledge Towards Firm Performance: The Moderation Role of the Business Environment

Abstract

The prominence of the knowledge economy technological innovation and economic development globally cannot be questioned. However, not all firms especially from Central and Eastern European to tap into the benefits coupled with new knowledge for improvement in firm innovation performance. Mostly, this is due to environmental factors confronting the firms. This study focused on the impact of External Knowledge (EK), R&D expenditure and ICT usage on firm innovation performance with the moderation role of informal competition. We used Resource Dependency Theory and Contingency theory as the theoretical background. A cross sectional data from the World Bank Enterprise Survey (WBES) 2019 on 3105 firms from CEE regions namely Czech Republic, Hungary, Slovakia, and Poland was analysed using logistic regression. These countries were selected because firms face elevated level of informal competition in the business environment. The study confirmed the hypotheses that, internal R&D, external knowledge and website availability and usage have positive and significant direct effect on technological innovation. Our study contributes to the literature of R&D and firm performance by highlighting the moderating effect of business environment (informal competition).