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Disentangling the effects of organizational capabilities, innovation and firm size on SME sales growth

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  • Lorraine Uhlaner

    ()

  • André Stel

    ()

  • Valérie Duplat

    ()

  • Haibo Zhou

    ()

Abstract

This paper focuses on certain drivers of SME sales growth related to knowledge and innovation. Building on the dynamic capabilities literature, we test whether two organizational capabilities (external sourcing and employee involvement in renewal activities) predict sales growth, and if so, whether such effects are mediated by process and/or product innovation. Based on survey data from a panel study of Dutch SMEs, and controlling for several firm characteristics (firm size, sector, age and family business), we conclude that external sourcing has direct effects on both product and process innovation, with an indirect effect (mediated by process innovation) on sales growth. In line with our hypothesis development, we also find that employee involvement, while positively affecting process innovation, has a negative effect on sales growth. Firm size moderates the effects of two of the variables (external sourcing and product innovation) on sales growth, with more positive effects found for the smallest firms, results supporting the nimbleness (versus resource-based) view. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Lorraine Uhlaner & André Stel & Valérie Duplat & Haibo Zhou, 2013. "Disentangling the effects of organizational capabilities, innovation and firm size on SME sales growth," Small Business Economics, Springer, vol. 41(3), pages 581-607, October.
  • Handle: RePEc:kap:sbusec:v:41:y:2013:i:3:p:581-607
    DOI: 10.1007/s11187-012-9455-7
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:jbrese:v:83:y:2018:i:c:p:120-129 is not listed on IDEAS
    2. repec:kap:sbusec:v:50:y:2018:i:1:d:10.1007_s11187-017-9884-4 is not listed on IDEAS
    3. Lee, Jooh & Kwon, He-Boong, 2017. "Progressive performance modeling for the strategic determinants of market value in the high-tech oriented SMEs," International Journal of Production Economics, Elsevier, vol. 183(PA), pages 91-102.
    4. Wilfred Dolfsma & Gerben Velde, 2014. "Industry innovativeness, firm size, and entrepreneurship: Schumpeter Mark III?," Journal of Evolutionary Economics, Springer, vol. 24(4), pages 713-736, September.
    5. Alexandra Tsvetkova & Jean-Claude Thill & Deborah Strumsky, 2014. "Metropolitan innovation, firm size, and business survival in a high-tech industry," Small Business Economics, Springer, vol. 43(3), pages 661-676, October.
    6. De Clercq, Dirk & Belausteguigoitia, Imanol, 2015. "Intergenerational strategy involvement and family firms’ innovation pursuits: The critical roles of conflict management and social capital," Journal of Family Business Strategy, Elsevier, vol. 6(3), pages 178-189.
    7. Stav Fainshmidt & Amir Pezeshkan & M. Lance Frazier & Anil Nair & Edward Markowski, 2016. "Dynamic Capabilities and Organizational Performance: A Meta-Analytic Evaluation and Extension," Journal of Management Studies, Wiley Blackwell, vol. 53(8), pages 1348-1380, December.
    8. Mirzaei, Omid & Micheels, Eric T. & Boecker, Andreas, 2016. "Product and Marketing Innovation in Farm-Based Businesses: The Role of Entrepreneurial Orientation and Market Orientation," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 19(2).

    More about this item

    Keywords

    SMEs; Sales growth; Dynamic capabilities; Innovation; Knowledge; Empirical study; Lead-lag effect; D22; D83; L25; O31;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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