Entrepreneurial orientation and SME growth: the mediating effect of product, process, and business model innovations

What the paper says

Purpose This study aims to examine the effect of different types of innovation on the relationship between entrepreneurial orientation (EO) and small to medium enterprise (SME) growth. Design/methodology/approach This study used a quantitative approach to collect data from 480 SMEs in Australia and New Zealand through convenience sampling. Findings Based on partial least square structural equation modelling, this study found a direct positive relationship between EO and SME growth and an indirect positive relationship between EO and SME growth through business model innovation (BMI). This study emphasised that while SMEs use different types of innovation, they will achieve significant growth by innovating their business models. Research limitations/implications The work has some limitations as the focus was on two countries (Australia and New Zealand) considered as developed countries. The result may differ when the study is conducted in developing countries. Also, EO was measured as a unidimensional construct without looking at the individual contributions of the EO dimensions to growth. Practical implications SME owner managers seeking growth of their firms must focus their effort on innovating their business models to achieve competitive advantage. Also, SMEs can integrate their product and process innovations in their BMIs to minimise imitation and increase growth. Originality/value The novelty of this paper is that while there are existing studies on EO and SME growth, this paper explores the mediating effect of different types of innovation on the relationship between EO and SME growth.