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A multi-dimensional analysis on how different types of innovations impact SMEs business performance

Author

Listed:
  • Juan A. Sanchis-Llopis

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

  • Alfonso Expósito

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

Abstract

This paper examines the impact of innovation decisions on business performance for small and medium-sized enterprises based on a multi-dimensional analytical approach. With this aim, the impact of the firm’s innovation decisions (in terms of the introduction of product, process, and/or organisational innovation) on four alternative performance indicators (two financial indicators: sales increase and cost reduction; and two operational indicators: increase of productive capacity and improvement in quality) is analysed. Additionally, an array of potential moderating determinants (such as firm and entrepreneur characteristics) are controlled for. Our findings highlight the existence of positive impacts of innovation decisions on both dimensions of business performance (financial and operational), but these impacts significantly differ depending on the type of innovation and the performance indicator considered. Thus, in order to study the multifaceted effects of innovation decisions made by the firm, results point out that the relationship between innovation (product, process, or organisational) and business performance should be analysed from a multi-dimensional approach. These findings imply significant implications for the design and implementation of innovation strategies in SMEs, since these should be tailored according to the business performance sought by the firm.

Suggested Citation

  • Juan A. Sanchis-Llopis & Alfonso Expósito, 2019. "A multi-dimensional analysis on how different types of innovations impact SMEs business performance," Working Papers 1902, Department of Applied Economics II, Universidad de Valencia.
  • Handle: RePEc:eec:wpaper:1902
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    More about this item

    Keywords

    innovation; business performance; SMEs; Spain;

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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