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Impacts of external knowledge and interaction on innovation capability among Indonesian SMEs

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  • Nurul Indarti

Abstract

This study focuses on the impact of external knowledge and the interaction on the innovation capability. Findings from a survey among 198 Indonesian SMEs show that depth of knowledge that is absorbed by a focal firm has a significant impact on the innovation capability. Alike, the interaction affects significantly on the innovation capability. The model explains about 25% of the innovation capability. Additionally, the effect of depth of knowledge and the interaction on firms' innovation capabilities is stronger for older firms than for younger ones. The impact of depth of knowledge on firms' innovation capabilities is stronger for smaller firms than for larger ones. The study confirms that the level of innovation capability among software firms is significantly higher than that among furniture firms. The findings can be used as a basis for setting up appropriate initiatives and policies to promote the SMEs, especially in the context of emerging economies.

Suggested Citation

  • Nurul Indarti, 2017. "Impacts of external knowledge and interaction on innovation capability among Indonesian SMEs," International Journal of Business Innovation and Research, Inderscience Enterprises Ltd, vol. 13(4), pages 430-450.
    • Handle: RePEc:ids:ijbire:v:13:y:2017:i:4:p:430-450
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    Cited by:

    1. Afris Widya-Hasuti & Abbas Mardani & Dalia Streimikiene & Ali Sharifara & Fausto Cavallaro, 2018. "The Role of Process Innovation between Firm-Specific Capabilities and Sustainable Innovation in SMEs: Empirical Evidence from Indonesia," Sustainability, MDPI, vol. 10(7), pages 1-26, June.
    2. María Isabel Camio & María Del Carmen Romero & María Belén Álvarez & Alfredo José Rébori, 2018. "Distinctive Innovation Capabilities of Argentine Software Companies with High Innovation Results and Impacts," Administrative Sciences, MDPI, vol. 8(2), pages 1-22, April.

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