Innovation capabilities and export performance of small and medium-sized enterprises in Tanzania: the moderating effect of managers’ entrepreneurial orientation
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Date
2023
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The University of Dodoma
Abstract
Small and medium-sized enterprises (SMEs) have been a major contributor to economies and representing the majority of enterprises globally, yet their export performance has been disappointing. Most SMEs fall short of meeting the set export targets, resulting in a low contribution to the overall exports of their countries. Despite the literature broadly acknowledging innovation capabilities as a potential determinant of SMEs’ export performance, empirical evidence presents mixed results. Moreover, the studies have mainly concentrated on developed economies and larger firms, creating a lack of empirical evidence in the context of developing economies. In filling the gap, this research aims to examine the influence of innovation capabilities namely, product, process and marketing innovations on the export performance of SMEs in Tanzania. Additionally, the study further examined the moderating effect of managers' entrepreneurial orientation on the influence of innovation capabilities on export performance, an area that has not previously been examined. To achieve the objective, the study utilized resource-based view and dynamic capabilities theories to develop the conceptual model. The conceptual model was validated using data obtained from 250 top managers of exporting SMEs operating in the manufacturing sector in Tanzania. A stratified random sampling technique was utilized where the strata were determined based on the industries to which exporting SMEs belong. A positivism philosophy was adopted through which six hypotheses that governed this study were formulated and a cross-sectional survey design was used. The collected data was analysed using exploratory factor analysis, confirmatory factor analysis and the PROCESS macro. The results revealed that product innovation and marketing innovation have a significant positive influence on the export performance of SMEs, while process innovation has a significant negative influence on the export performance. Additionally, the findings reveal that managers’ EO significantly moderates the influence of all three innovations capabilities on the export performance. The study recommends that SME managers prioritize investments in product and marketing innovation, while carefully considering the potential drawbacks of process innovation on export performance. Moreover, managers should not only focus on investing and implementing product and marketing innovations but also developing their EO, as it influences the effectiveness of innovation capabilities in enhancing SMEs’ export performance.
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Ringo, D. S. (2023). Innovation capabilities and export performance of small and medium-sized enterprises in Tanzania: the moderating effect of managers’ entrepreneurial orientation, (Doctoral Thesis) The University of Dodoma.