Non-R&D-based innovation activities and performance in Chinese SMEs: the role of absorptive capacity

Abstract

To what extent can non-R&D-based innovation contribute to innovation performance in small- and medium-sized enterprises (SMEs)? To answer this question, this study investigates the moderating role of absorptive capacity in the relationships between three non-R&D-based innovation activities and firms’ innovation performance, namely ‘technology adoption,’ ‘imitation and minor modification,’ and ‘innovative marketing.’ Using data on 329 Chinese manufacturing SMEs, we find that the absorptive capacity of SMEs positively moderates the relationship between innovative marketing and innovation performance. However, the absorptive capacity of SMEs negatively moderates the relationship between imitation and minor modification and their innovation performance. These findings contribute to understanding the effects of non-R&D-based innovation activities, and the role of SMEs’ absorptive capacity in a non-R&D context.