Firm Innovativeness and Export Performance: Environmental, Networking, and Structural Contingencies

Much scholarly work has explored the benefits firms accrue from innovation activities. Although some research has shown that firm innovativeness is associated with enhanced export success, the conditions under which firm innovativeness activities are most and least beneficial are not well understood. The authors take a contingency perspective and use social capital theory to investigate how internal channel networking capability and structural factors as well as external environment factors affect the innovativeness–export performance relationship. Analysis of samples of exporting firms from Ghana and Bosnia and Herzegovina indicates that innovativeness is most beneficial for firms operating in competitive and dynamic export markets; those in less competitive and static markets do not benefit from their innovation activities to the same extent. Stronger networking capabilities and a more organic structure also enhance the innovativeness–export performance relationship. The findings imply that the management of firm innovativeness is not a straightforward task in which greater emphasis on innovation activities is always beneficial for firms; rather, exporting organizations must match firm innovativeness levels to external environmental conditions and internal capabilities and structures.

[1]  E. Anderson,et al.  The Antecedents and Consequences of Customer Satisfaction for Firms , 1993 .

[2]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[3]  R. Morgan,et al.  Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth , 2007 .

[4]  Oliver Schilke On the Contingent Value of Dynamic Capabilities for Competitive Advantage: The Nonlinear Moderating Effect of Environmental Dynamism , 2014 .

[5]  F. Bradley,et al.  Does the Firm's Technology and Marketing Profile Affect Foreign Market Entry? , 2000 .

[6]  Kent Eriksson,et al.  The effect of experience and absorptive capacity on foreign market knowledge , 2003 .

[7]  D. De Clercq,et al.  Entrepreneurial Strategic Posture and Performance in Foreign Markets: The Critical Role of International Learning Effort , 2014 .

[8]  R. Calantone,et al.  Learning orientation, firm innovation capability, and firm performance , 2002 .

[9]  Annie Peng Cui,et al.  The Importance of Strategic Fit between Host–Home Country Similarity and Exploration Exploitation Strategies on Small and Medium-Sized Enterprises’ Performance: A Contingency Perspective , 2014 .

[10]  Gregory G. Dess,et al.  Clarifying the Entrepreneurial Orientation Construct and Linking It To Performance , 1996 .

[11]  J. Steenkamp,et al.  Assessing Measurement Invariance in Cross-National Consumer Research , 1998 .

[12]  Moses Acquaah Managerial social capital, strategic orientation, and organizational performance in an emerging economy , 2007 .

[13]  James M. Sinkula,et al.  The Complementary Effects of Market Orientation and Entrepreneurial Orientation on Profitability in Small Businesses** , 2009 .

[14]  R. Calantone,et al.  The influence of internal and external firm factors on international product adaptation strategy and export performance: A three-country comparison , 2006 .

[15]  Katrijn Gielens,et al.  Drivers of consumer acceptance of new packaged goods: An investigation across products and countries , 2007 .

[16]  G. Bruton,et al.  Strategic orientations and strategies of high technology ventures in two transition economies , 2011 .

[17]  A. Neely,et al.  Networking and Innovation: A Systematic Review of the Evidence , 2004 .

[18]  T. Jambulingam,et al.  Entrepreneurial orientation as a basis for classification within a service industry: the case of retail pharmacy industry , 2005 .

[19]  E. Autio,et al.  SOCIAL CAPITAL, KNOWLEDGE ACQUISITION, AND KNOWLEDGE EXPLOITATION IN YOUNG TECHNOLOGY-BASED FIRMS , 2001 .

[20]  D. Griffith,et al.  Country-Level Performance of New Experience Products in a Global Rollout: The Moderating Effects of Economic Wealth and National Culture , 2014 .

[21]  Ian Wilkinson,et al.  An Opportunity-Based View of Rapid Internationalization , 2012 .

[22]  Yue Wang,et al.  Entrepreneurial orientation, social capital, and the internationalization of SMES: Evidence from China , 2012 .

[23]  Gerard George,et al.  The dynamic impact of innovative capability and inter-firm network on firm valuation: A longitudinal study of biotechnology start-ups , 2010 .

[24]  P. Beamish,et al.  INTERNATIONAL DIVERSIFICATION AND FIRM PERFORMANCE: THE S-CURVE HYPOTHESIS , 2004 .

[25]  Xueming Luo,et al.  Working with Rivals: The Impact of Competitor Alliances on Financial Performance , 2007 .

[26]  G. Knight Entrepreneurship and Marketing Strategy: The SME under Globalization , 2000 .

[27]  Constance E. Helfat,et al.  Untangling dynamic and operational capabilities: strategy for the (n)ever-changing world , 2011 .

[28]  Mark S. Granovetter The Impact of Social Structure on Economic Outcomes Social Networks and Economic Outcomes: Core Principles , 2022 .

[29]  Mike W. Peng,et al.  Managerial Ties and Firm Performance in a Transition Economy: The Nature of a Micro-Macro Link , 2000 .

[30]  H. Chung,et al.  Export market orientation, managerial ties, and performance , 2012 .

[31]  J. Farley,et al.  Corporate Culture, Customer Orientation, and Innovativeness in Japanese Firms: A Quadrad Analysis , 1993 .

[32]  Bernard J. Jaworski,et al.  Market orientation: Antecedents and consequences , 1993 .

[33]  Kåre Sandvik,et al.  The impact of market orientation on product innovativeness and business performance , 2003 .

[34]  David F. Larcker,et al.  Structural Equation Models with Unobservable Variables and Measurement Error: Algebra and Statistics: , 1981 .

[35]  Margaret A. Peteraf,et al.  Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/mde.1126 Unraveling The Resource-Based Tangle , 2022 .

[36]  Michael Song,et al.  Marketing and technology resource complementarity : An analysis of their Interaction Effect in two environmental contexts , 2005 .

[37]  Vikas Kumar,et al.  Nature of the relationship between international expansion and performance: The case of emerging market firms , 2007 .

[38]  Richard P. Bagozzi,et al.  Specification, evaluation, and interpretation of structural equation models , 2012 .

[39]  Guisheng Wu,et al.  What Are the Effective Strategic Orientations for New Product Success under Different Environments? An Empirical Study of Chinese Businesses* , 2012 .

[40]  Joseph T. Mahoney,et al.  Strategic Management Journal Research Notes and Commentaries How Dynamics, Management, and Governance of Resource Deployments Influence Firm-level Performance , 2022 .

[41]  Kalina B. Manova,et al.  Export Prices across Firms and Destinations , 2009 .

[42]  J. Barney Firm Resources and Sustained Competitive Advantage , 1991 .

[43]  M. Talias,et al.  Antecedents and Outcomes of Exporter–Importer Relationship Quality: Synthesis, Meta-Analysis, and Directions for Further Research , 2014 .

[44]  R. Cook International Bank for Reconstruction and Development , 1951, International Organization.

[45]  Neil A. Morgan,et al.  Antecedents of Export Venture Performance: A Theoretical Model and Empirical Assessment , 2004 .

[46]  J. Jaccard,et al.  LISREL Approaches to Interaction Effects in Multiple Regression , 1998 .

[47]  Jaehoon Rhee,et al.  Drivers of innovativeness and performance for innovative SMEs in South Korea: Mediation of learning orientation , 2010 .

[48]  Eric Wood,et al.  Organizational entrainment and international new ventures from emerging markets , 2010 .

[49]  M. Lindell,et al.  Accounting for common method variance in cross-sectional research designs. , 2001, The Journal of applied psychology.

[50]  Robert D. Russell,et al.  An Examination of the Effects of Organizational Norms, Organizational Structure, and Environmental Uncertainty on Entrepreneurial Strategy , 1992 .

[51]  J. Spender,et al.  The Resource-Based View: A Review and Assessment of Its Critiques , 2009 .

[52]  James A. Bovaird,et al.  On the Merits of Orthogonalizing Powered and Product Terms: Implications for Modeling Interactions Among Latent Variables , 2006 .

[53]  George Baltas,et al.  Organisational innovation in SMEs , 2004 .

[54]  Choonwoo Lee,et al.  Internal capabilities, external linkages, and performance. A study on technology-based ventures , 2001 .

[55]  E. Ofek,et al.  Strategic orientations in a competitive context: The role of strategic orientation differentiation , 2012 .

[56]  Alexander Kock,et al.  Top management team diversity and strategic innovation orientation: the relationship and consequences for innovativeness and performance , 2011 .

[57]  Sascha Kraus,et al.  Innovation in knowledge-intensive industries: The double-edged sword of coopetition , 2013 .

[58]  Robert E. Hoskisson,et al.  BOARD OF DIRECTOR INVOLVEMENT IN RESTRUCTURING: THE EFFECTS OF BOARD VERSUS MANAGERIAL CONTROLS , 1993 .

[59]  D. Shepherd,et al.  Entrepreneurial Orientation and Small Business Performance: A Configurational Approach , 2005 .

[60]  S. Cavusgil,et al.  Marketing Strategy-Performance Relationship: An Investigation of the Empirical Link in Export Market Ventures , 1994 .

[61]  S. Sundqvist,et al.  Kirznerian and Schumpeterian entrepreneurial‐oriented behavior in turbulent export markets , 2012 .

[62]  G. Balabanis,et al.  Being an entrepreneurial exporter: does it pay? , 2003 .

[63]  K. Atuahene–Gima,et al.  Market Knowledge Dimensions and Cross-Functional Collaboration: Examining the Different Routes to Product Innovation Performance , 2007 .

[64]  S. Tamer Cavusgil,et al.  The GMS: A Broad Conceptualization of Global Marketing Strategy and Its Effect on Firm Performance , 2002 .

[65]  Changsu Kim,et al.  The Global Research-and-Development Network and Its Effect on Innovation , 2010 .

[66]  K. Zhou,et al.  How foreign firms achieve competitive advantage in the Chinese emerging economy: Managerial ties and market orientation , 2010 .

[67]  David M. Brock,et al.  Multinational Strategy and Structure: A Review and Research Agenda , 2004 .

[68]  L. F. Lages,et al.  Relationship Capabilities, Quality, and Innovation as Determinants of Export Performance , 2009 .

[69]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[70]  D. Slevin,et al.  A Conceptual Model of Entrepreneurship as Firm Behavior , 1991 .

[71]  S. Cavusgil,et al.  Do barriers to export vary for born globals and across stages of internationalization? An empirical inquiry in the emerging market of Turkey☆ , 2013 .

[72]  Larry E. Toothaker,et al.  Multiple Regression: Testing and Interpreting Interactions , 1991 .

[73]  A. Rangaswamy,et al.  Performance implications of deploying marketing analytics , 2013 .

[74]  S. Sundqvist,et al.  Firms’ degree of born-globalness, international entrepreneurial orientation and export performance , 2007 .

[75]  M. Kotabe,et al.  Market orientation and performance of export ventures: the process through marketing capabilities and competitive advantages , 2011 .

[76]  Kevin Zheng Zhou,et al.  The Effects of business and Political Ties on Firm Performance: Evidence from China. , 2011 .

[77]  Jagdip Singh,et al.  Measurement Issues in Cross-National Research , 1995 .

[78]  R. Ping A Parsimonious Estimating Technique for Interaction and Quadratic Latent Variables , 1995 .

[79]  Gary A. Knight,et al.  International business competence and the contemporary firm , 2009 .

[80]  Terry S. Overton,et al.  Estimating Nonresponse Bias in Mail Surveys , 1977 .

[81]  Neil A. Morgan,et al.  Export marketing strategy implementation, export marketing capabilities, and export venture performance , 2011, Journal of the Academy of Marketing Science.

[82]  P. Lawrence,et al.  Differentiation and Integration in Complex Organizations , 1967 .

[83]  Christine Moorman,et al.  Interfirm Cooperation and Customer Orientation , 2003 .

[84]  Seung Ho Park,et al.  EFFECTS OF PROFITABILITY AND LIQUIDITY ON R&D INTENSITY: JAPANESE AND U.S. COMPANIES COMPARED , 1996 .

[85]  Micheline Goedhuys,et al.  High-growth entrepreneurial firms in Africa: a quantile regression approach , 2010 .

[86]  Maxwell K. Hsu,et al.  The moderating role of institutional networking in the customer orientation–trust/commitment–performance causal chain in China , 2008 .

[87]  Noel J. Lindsay,et al.  Entrepreneurial, market, and learning orientations and international entrepreneurial business venture performance in South African firms , 2006 .

[88]  A. Joshi,et al.  Effect of environmental dynamism on relational governance in manufacturer-supplier relationships: A contingency framework and an empirical test , 2003 .

[89]  P. H. Friesen,et al.  Innovation in Conservative and Entrepreneurial Firms: Two Models of Strategic Momentum , 1982 .

[90]  David J. Miller,et al.  Configurations of strategy and structure: Towards a synthesis , 1986 .

[91]  K. Bollen A New Incremental Fit Index for General Structural Equation Models , 1989 .

[92]  J. Cadogan International marketing, strategic orientations and business success , 2012 .

[93]  Haiyang Li,et al.  Product Innovation Strategy and the Performance of New Technology Ventures in China , 2001 .

[94]  S. Sundqvist,et al.  Export Market-Oriented Behavior and Export Performance: Quadratic and Moderating Effects under Differing Degrees of Market Dynamism and Internationalization , 2009 .

[95]  D. Slevin,et al.  Strategic management of small firms in hostile and benign environments , 1989 .

[96]  Chin-Chun Hsu,et al.  Social ties and foreign market entry: An empirical inquiry , 2007 .

[97]  Dean A. Shepherd,et al.  Where to from Here? EO-as-Experimentation, Failure, and Distribution of Outcomes , 2011 .

[98]  Daniel A. McFarland,et al.  Ties That Last : Tie Formation and Persistence in Research Collaborations over Time , 2013 .

[99]  P. Matthyssens,et al.  ASSESSING EXPORT PERFORMANCE MEASUREMENT , 1996 .

[100]  H. Jansson,et al.  Reducing Uncertainty in the Emerging Market Entry Process: On the Relationship among International Experiential Knowledge, Institutional Distance, and Uncertainty , 2012 .

[101]  S. Birley,et al.  Growth and performance contrasts between ‘types’ of small firms , 1990 .

[102]  Patrick A.M. Vermeulen,et al.  Identifying key determinants for new product introductions and firm performance in small service firms , 2005 .

[103]  Rajesh Chandy,et al.  Radical Innovation across Nations: The Preeminence of Corporate Culture , 2009 .

[104]  A. Pecotich,et al.  Social Factors Influencing Export Initiation in Small and Medium-Sized Enterprises , 2001 .

[105]  Bruce J. Biddle,et al.  Panel Studies and Causal Inference , 1985 .

[106]  Erol Taymaz,et al.  Does innovativeness matter for international competitiveness in developing countries?: The case of Turkish manufacturing industries , 2004 .

[107]  C. Katsikeas,et al.  Export Product Strategy Fit and Performance: An Empirical Investigation , 2009 .

[108]  Nina Rosenbusch,et al.  Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs , 2011 .

[109]  P. Schoemaker,et al.  Strategic assets and organizational rent , 1993 .

[110]  I. Barreto Dynamic Capabilities: A Review of Past Research and an Agenda for the Future , 2010 .

[111]  J. Pennings,et al.  Internal capabilities, external networks, and performance: a study on technology‐based ventures , 2001 .

[112]  Gregory G. Dess,et al.  Measuring organizational performance in the absence of objective measures: The case of the privately-held firm and conglomerate business unit , 1984 .

[113]  Constantinos N. Leonidou,et al.  Sustainable Export Marketing Strategy Fit and Performance , 2014 .