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Innovation and business performance for Spanish SMEs: new evidence from a multi-dimensional approach

Author

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  • Alfonso Expósito

    (Department of Economic Analysis and Political Economy, University of Seville, Calle San Fernando 4, 41004 Sevilla (Spain).)

  • Juan A. Sanchis-Llopis

    (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)

Abstract

This paper examines the impacts of product, process, and organisational innovations on two alternative dimensions of business performance: finance and operations. Two indicators capture financial performance: sales increase and production cost reduction. Operational firm performance is captured by two alternative indicators: productive capacity augmentation and quality improvement of product/service provided by the firm. Using a wide-ranging sample of Spanish SMEs, our findings highlight the existence of significant impacts of innovation on both these dimensions of business performance, although these impacts differ regarding the type of innovation and the performance indicator considered. Furthermore, our results indicate that the relationship between innovation choices in SMEs and business performance should be analysed from a multidimensional approach. These findings reveal significant implications for innovation policies and innovation strategies for SMEs.

Suggested Citation

  • Alfonso Expósito & Juan A. Sanchis-Llopis, 2018. "Innovation and business performance for Spanish SMEs: new evidence from a multi-dimensional approach," Working Papers 1805, Department of Applied Economics II, Universidad de Valencia.
    • Handle: RePEc:eec:wpaper:1805
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    2. Alfredo Grau & Araceli Reig, 2021. "Operating leverage and profitability of SMEs: agri-food industry in Europe," Small Business Economics, Springer, vol. 57(1), pages 221-242, June.
    3. Alfonso Exposito & Juan A. Sanchis-Llopis, 2020. "The effects of innovation on the decisions of exporting and/or importing in SMEs: empirical evidence in the case of Spain," Small Business Economics, Springer, vol. 55(3), pages 813-829, October.
    4. Smith, Hannah & Discetti, Roberta & Bellucci, Marco & Acuti, Diletta, 2022. "SMEs engagement with the Sustainable Development Goals: A power perspective," Journal of Business Research, Elsevier, vol. 149(C), pages 112-122.
    5. HMJCB Heenkenda & Fengju Xu & KMMCB Kulathunga & WAR Senevirathne, 2022. "The Role of Innovation Capability in Enhancing Sustainability in SMEs: An Emerging Economy Perspective," Sustainability, MDPI, vol. 14(17), pages 1-22, August.
    6. Roth Cardoso, Hugo Henrique & Dantas Gonçalves, Adriana & Dambiski Gomes de Carvalho, Gustavo & Gomes de Carvalho, Hélio, 2020. "Evaluating innovation development among Brazilian micro and small businesses in view of management level: Insights from the local innovation agents program," Evaluation and Program Planning, Elsevier, vol. 80(C).
    7. Zahoor, Nadia & Donbesuur, Francis & Christofi, Michael & Miri, Domnan, 2022. "Technological innovation and employee psychological well-being: The moderating role of employee learning orientation and perceived organizational support," Technological Forecasting and Social Change, Elsevier, vol. 179(C).
    8. Alfonso Expósito & Juan A. Amparo Sanchis-Llopis & Juan A. Juan A. Sanchis-Llopis, 2023. "Does entrepreneur gender matter in SMEs performance? The role of innovations," Working Papers 2308, Department of Applied Economics II, Universidad de Valencia.
    9. Anak Agung Dwi Widyani & I Nengah Suardhika & Ni Putu Yeni Astiti & Ni Wayan Rustiarini, 2022. "Triple Helix: the concept of synergy for SMEs to increase business performance," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 24(2), pages 174-191, December.
    10. Nadežda Jankelová & Zuzana Joniaková & Juraj Mišún, 2021. "Innovative Work Behavior—A Key Factor in Business Performance? The Role of Team Cognitive Diversity and Teamwork Climate in This Relationship," JRFM, MDPI, vol. 14(4), pages 1-16, April.
    11. Nigel Driffield & Jun Du & Jan Godsell & Mark Hart & Katiuscia Lavoratori & Steven Roper & Irina Surdu & Wanrong Zhang, 2021. "Understanding productivity:Organisational Capital perspectives," Working Papers 013, The Productivity Institute.
    12. Alfonso Expósito & Amparo Sanchis-Llopis & Juan A. Sanchis-Llopis, 2021. "The effect of the manager gender on SMEs export and import decisions: Evidence for Spain," Working Papers 2115, Department of Applied Economics II, Universidad de Valencia.
    13. Sushil & Kamala Kannan Dinesh, 2022. "Structured Literature Review with TISM Leading to an Argumentation Based Conceptual Model," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 23(3), pages 387-407, September.
    14. Ramadani, Veland & Hisrich, Robert D. & Abazi-Alili, Hyrije & Dana, Léo-Paul & Panthi, Laxman & Abazi-Bexheti, Lejla, 2019. "Product innovation and firm performance in transition economies: A multi-stage estimation approach," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 271-280.
    15. Huy-Cuong Vo-Thai & Trinh-Hoang Hong-Hue & My-Linh Tran, 2021. "Technological- and Non-Technological Innovation During the Growth Phase of Industry Life Cycle: An Evidence From Vietnamese Manufacturing Enterprises," SAGE Open, , vol. 11(3), pages 21582440211, July.
    16. Khoa T. Tran & Phuong V. Nguyen & Linh M. Nguyen, 2018. "The Role of Financial Slack, Employee Creative Self-Efficacy and Learning Orientation in Innovation and Organizational Performance," Administrative Sciences, MDPI, vol. 8(4), pages 1-32, December.
    17. Alfonso Expósito & Amparo Sanchis-Llopis & Juan A. Sanchis-Llopis, 2024. "Entrepreneur’s Gender and SMEs Performance: the Mediating Effect of Innovations," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 11877-11911, September.
    18. Gezim Jusufi & Donat Rexha & Besime Ziberi, 2024. "Innovations and Entreprises Performance in Transition Countries, with Special Emphasis on Kosovo: CDM Model Approach," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 77-91.
    19. Nawal Adam & Areej Alfawaz, 2025. "Enhancing organizational performance: how gender diversity enhances employee engagement and commitment," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-11, December.
    20. Alfonso Expósito & Amparo Sanchis-Llopis & Juan A. Sanchis-Llopis, 2022. "Manager gender, entrepreneurial orientation and SMEs export and import propensities: evidence for Spanish businesses," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(2), pages 315-347, June.

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    More about this item

    Keywords

    innovation; business performance; multi-dimensional analysis; SME; Spain;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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