The impact of business model innovation and knowledge management on firm performance: an emerging markets perspective

Abstract

PurposeDespite the growing literature on business model innovation (BMI) and its implications for firm performance, the research on the antecedents of BMI is still at a budding stage. Therefore, the purpose of this paper is to bridge this gap by examining the causal relationships between knowledge management, BMI, competitive advantage, and firm performance.Design/methodology/approachA purposive sample of 300 micro, small, and medium enterprises was collected with more than 500 employees and total revenue between 50 and 500 million Indian Rupees, according to the Development Act, 2005. The collected data were analyzed using structural equation modeling through smart PLS 3.FindingsThe study’s findings show that knowledge management significantly influences BMI. This study also highlights the synergic impact of Knowledge management and BMI on firm performance. Furthermore, findings highlight the mediating role of competitive advantage in the relationship between knowledge management, BMI, and firm performance.Practical implicationsUnderstanding the impact of BMI and knowledge management is crucial for business owners, managers, and other stakeholders to plan for the continuous improvement of their businesses. Managers can secure a favorable position in the competitive market and improve organizational performance by paying attention to effectively managing their knowledge resources.Originality/valueThe study is one of the first few empirical efforts to investigate the causal relationships between knowledge management, BMI and firm performance. The study adds to the scant literature in this area by highlighting the mediating role of competitive advantage.