Mapping the two-way relationship between management practices and firm innovation: the mediating role of business environment, degree of competition, and energy policies

Abstract

PurposeThis study aims to evaluate the two-way relationship between management practices and firm innovation along with the dual mediation of business environment, degree of competition and energy policies in Greece, Italy, Turkey and Portugal.Design/methodology/approachThe study has derived data from the World Bank Enterprise Survey 2019 for Greece, Italy, Turkey and Portugal and analyzed through partial least squares structural equation modelling (PLS-SEM) to find results.FindingsThe outcomes of PLS-SEM revealed that management practices and firm innovation have two-way positive significant relationship with each other in Greece, Italy, Turkey and Portugal. The results exposed that the management practices and firm innovation have two-way positive significant relationship with the business environment, degree of competition, and energy policies in Greece, Italy, Turkey and Portugal. The findings also clarified that the business environment, degree of competition and energy policies have dual mediating role between management practices and firm innovation in Greece, Turkey and Portugal. Surprisingly, business environment does not have dual mediation in Italy.Practical implicationsThese useful insights would enable practitioners and direct policymakers to develop and apply more magnificent management practices to boost up innovation among firms.Originality/valueAlthough the topics of management practices and innovation have received a great concern of academia, but this is the first study that offers a comprehensive model of the relationship in these domains.