Technology Acquisition and SMEs Performance, the Role of Innovation, Export and the Perception of Owner-Managers

Edmund Mallinguh,Zeman Zoltan,Christopher Wasike

doi:10.3390/jrfm13110258

Abstract

Sufficient literature supports small and medium ‘enterprises’ (SMEs) significant role in emerging and mature economies. Still, the same research highlights varying challenges that innovative firms in developing economies face, like access to formal credit and external markets. This study examines the effect of a capital budget’s proportion for acquiring new technology and sale performance between 2017–2019 using a sample of 101 Kenyan SMEs. The ordinary least square moderated mediation results indicate that: (1) the proportion of the capital budget allocated for the acquisition of technology positively and significantly influences sales; (2) the index of moderated mediation suggests that the perception of firm owner-managers towards the availability of formal credit moderates the mediated relationship between the capital budget’s portion spent on technology and sales as mediated by innovation activities. However, the index is insignificant for the second mediator, export longevity. However, in the final model, both the level of innovation and export longevity positively and substantially affect sales.

Highlights

Firms operate in a rapidly changing business environment, and they must evolve too, least they find their processes obsolete and products less competitive
The ordinary least square moderated mediation results indicate that: (1) the proportion of the capital budget allocated for the acquisition of technology positively and significantly influences sales; (2) the index of moderated mediation suggests that the perception of firm owner-managers towards the availability of formal credit moderates the mediated relationship between the capital budget’s portion spent on technology and sales as mediated by innovation activities
The current study examines the interplay between technology acquisition and financial performance based on other factors like owner-managers perception of traditional finance availability, innovation activities, and export longevity

Summary

Introduction

Firms operate in a rapidly changing business environment, and they must evolve too, least they find their processes obsolete and products (or services) less competitive. Customers’ demands, preferences, and expectations of products from these firms keep changing too. Firms must secure and maintain technology—businesses need to acquire information on future technology while developing asset maintenance and replacement strategies (Nguyen et al 2017). Firm maintenance costs increase when technology becomes older due to deterioration. Both new capital and maintenance costs vary over the age of a fixed asset because of technological change. Firms need to make provisions for the maintenance of existing equipment or the acquisition of new technology

Methods

Results

Discussion

Conclusion