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The effects of knowledge management and risk taking on SME financial performance in creative industries in an emerging market: the mediating effect of innovation outcomes

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  • Donard Games

    (Universitas Andalas, Kampus Limau Manis)

  • Ranggi Putri Rendi

    (Universitas Andalas, Kampus Limau Manis)

Abstract

The purpose of the present study is to examine the effects of knowledge management and risk taking on financial performance in which negative innovation outcomes was chosen as a mediator variable. The present study uses the context of small and medium enterprises (SMEs) in creative industries in Indonesia which is an emerging market economy. Based on an analysis of data from 165 small business owners in creative industries in Indonesia, the present study found some interesting notion regarding SME innovation. The results of this study indicate the importance of knowledge management and risk taking as ways of reducing negative innovation outcomes. Further, it was found that negative innovation outcomes did not mediate the links between knowledge management, risk taking, and SME financial performance. The present study offers some insights from Indonesia as an emerging market economy which may have different characteristics compared to other contexts. Risk taking represents a clear growth path to enhance SME financial performance. This is partly because Indonesia as an emerging market with a collectivist culture may encourage SMEs to be more open to changes and social networks that enhance knowledge management, and more importantly new ways of doing business. The present study uses negative innovation outcomes and SME financial performance to indicate whether SMEs in an emerging market economy can benefit from business innovation.

Suggested Citation

  • Donard Games & Ranggi Putri Rendi, 2019. "The effects of knowledge management and risk taking on SME financial performance in creative industries in an emerging market: the mediating effect of innovation outcomes," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-14, December.
    • Handle: RePEc:spr:jglont:v:9:y:2019:i:1:d:10.1186_s40497-019-0167-1
    DOI: 10.1186/s40497-019-0167-1
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    References listed on IDEAS

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    5. Ramin Bashir Khodaparasti & Hooshmand Bagheri Garabollagh, 2023. "Examining Circular Economy Practices and Sustainability Performance in Knowledge-Based Companies in Iran," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 25(62), pages 196-196, February.
    6. Chowdhury, Soumyadeb & Dey, Prasanta Kumar & Rodríguez-Espíndola, Oscar & Parkes, Geoff & Tuyet, Nguyen Thi Anh & Long, Dang Duc & Ha, Tran Phuong, 2022. "Impact of Organisational Factors on the Circular Economy Practices and Sustainable Performance of Small and Medium-sized Enterprises in Vietnam," Journal of Business Research, Elsevier, vol. 147(C), pages 362-378.
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    8. Edgar Rogelio Ramírez-Solis & Mauro Rodriguez-Marin, 2022. "Diffusion Model for Mexican SMEs to Support the Success of Innovation," Sustainability, MDPI, vol. 14(16), pages 1-14, August.

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