Enhancing SME performance through innovation: evidence from a transition economy – Kosovo
Abstract
Purpose – What are the effects of implementing various types of innovation, including product, process, and technological innovations, on the performance of SMEs in the manufacturing sector? This is a question that preoccupies us a lot. This study seeks to examine the individual and integrated effects of these innovations. Indeed, we examine the impact of three categories of innovation – product, process, and technological innovation – on the performance of SMEs in the manufacturing industry.
Research methodology – We used a quantitative approach to execute this research, selecting SMEs at random using self-administered questionnaires. The data collected from 153 manufacturing SMEs was analyzed using hierarchical linear regression to investigate, evaluate, and refine the relation among product, process, and technological innovation and SME performance.
Findings – This study’s findings reveal a clear and direct relationship between these three forms of innovation and SMEs’ performance. This study also provides empirical evidence that various forms of innovation, either examined individually or as integrated, exert a positive effect on the performance of SMEs in the manufacturing industry.
Limitations – This study focuses on Kosovo-based SMEs, with the assumption of an upright connection between variables. Future studies can examine the existence of reverse causality in a variety of regional, cultural, and industrial settings.
Originality/Value – This study significantly advances existing knowledge by providing useful insights into the complex interplay among product, process, and technological innovation (examined from both individual and integrated perspectives) as well as the performance of SMEs in the manufacturing industry.
Keyword : product innovation, process innovation, technological innovation, SMEs performance, manufacturing industry, transition economy
How to Cite
Mulolli, E., Islami, X., & Hashani, M. (2024). Enhancing SME performance through innovation: evidence from a transition economy – Kosovo. Business, Management and Economics Engineering, 22(2), 401–420. https://doi.org/10.3846/bmee.2024.21800
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Abduraimi, P. B., Mustafi, M., & Islami, X. (2023). The role of organizational culture on employee engagement. Business: Theory and Practice, 24(1), 109–122. https://doi.org/10.3846/btp.2023.17241
Acquaah, M. (2007). Managerial social capital, strategic orientation, and organizational performance in an emerging economy. Strategic Management Journal, 28(12), 1235–1255. https://doi.org/10.1002/smj.632
Akram, K., Siddiqui, S. H., Nawaz, M. A., Ghauri, T. A., & Cheema, A. K. H. (2011). Role of knowledge management to bring innovation: An integrated approach. Celt: A Journal of Culture, English Language Teaching & Literature, 92(333), Article 6183035.
Alam, K., & Adeyinka, A. A. (2021). Does innovation stimulate performance? The case of small and medium enterprises in regional Australia. Australian Economic Papers, 60(3), 496–519. https://doi.org/10.1111/1467-8454.12216
Aliasghar, O., Sadeghi, A., & Rose, E. L. (2023). Process innovation in small-and medium-sized enterprises: The critical roles of external knowledge sourcing and absorptive capacity. Journal of Small Business Management, 61(4), 1583–1610. https://doi.org/10.1080/00472778.2020.1844491
Alves, I., & Lourenço, S. M. (2022). The use of non-financial performance measures for managerial compensation: Evidence from SMEs. Journal of Management Control, 33(2), 151–187. https://doi.org/10.1007/s00187-022-00337-8
Ameen, N. A., & Willis, R. (2016). The use of mobile phones to support women’s entrepreneurship in the Arab countries. International Journal of Gender and Entrepreneurship, 8(4), 424–445. https://doi.org/10.1108/IJGE-10-2015-0037
Ayandibu, A. O., & Houghton, J. (2017). The role of small and medium scale enterprise in local economic development (LED). Journal of Business and Retail Management Research, 11(2), 133–139.
Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2011). Firm innovation in emerging markets: The role of finance, governance, and competition. Journal of Financial and Quantitative Analysis, 46(6), 1545–1580. https://doi.org/10.1017/S0022109011000378
Battisti, G., & Stoneman, P. (2010). How innovative are UK firms? Evidence from the fourth UK community innovation survey on synergies between technological and organizational innovations. British Journal of Management, 21(1), 187–206. https://doi.org/10.1111/j.1467-8551.2009.00629.x
Bigliardi, B. (2013). The effect of innovation on financial performance: A research study involving SMEs. Innovation, 15(2), 245–255. https://doi.org/10.5172/impp.2013.15.2.245
Birkinshaw, J., Hamel, G., & Mol, M. J. (2008). Management innovation. Academy of Management Review, 33(4), 825–845. https://doi.org/10.5465/amr.2008.34421969
Bustinza, O. F., Gomes, E., Vendrell‐Herrero, F., & Baines, T. (2019). Product–service innovation and performance: The role of collaborative partnerships and R&D intensity. R & D Management, 49(1), 33–45. https://doi.org/10.1111/radm.12269
Cao, S., Nie, L., Sun, H., Sun, W., & Taghizadeh-Hesary, F. (2021). Digital finance, green technological innovation and energy-environmental performance: Evidence from China’s regional economies. Journal of Cleaner Production, 327, Article 129458. https://doi.org/10.1016/j.jclepro.2021.129458
Casals, F. E. (2011). The SME co-operation framework: A multi-method secondary research approach to SME collaboration. 2010 International Conference on E-business, Management and Economics IPEDR, 3(1), 118–124.
Chege, S. M., & Wang, D. (2020). The influence of technology innovation on SME performance through environmental sustainability practices in Kenya. Technology in Society, 60, Article 101210. https://doi.org/10.1016/j.techsoc.2019.101210
Chege, S. M., Wang, D., & Suntu, S. L. (2020). Impact of information technology innovation on firm performance in Kenya. Information Technology for Development, 26(2), 316–345. https://doi.org/10.1080/02681102.2019.1573717
Çütçü, I., & Bozan, T. (2019). Inovasyon ve ekonomik büyüme ilişkisi: G7 ülkeleri üzerini panel veri analizi [The relationship between innovation and economic growth: Panel data analysis on G7 countries. Uluslararası Ekonomi İşletme ve Politika Dergisi, 3(2), 289–310. https://doi.org/10.29216/ueip.607662
De Jong, J. P. J., & Marsili, O. (2006). The fruit flies of innovations: A taxonomy of innovative small firms. Research Policy, 35(2), 213–229. https://doi.org/10.1016/j.respol.2005.09.007
De Jong, J. P. J., & Vermeulen, P. A. M. (2006). Determinants of product innovation in small firms: A comparison across industries. International Small Business Journal, 24(6), 587–609. https://doi.org/10.1177/0266242606069268
Dunk, A. S. (2011). Product innovation, budgetary control, and the financial performance of firms. The British Accounting Review, 43(2), 102–111. https://doi.org/10.1016/j.bar.2011.02.004
Endris, E., & Kassegn, A. (2022). The role of micro, small and medium enterprises (MSMEs) to the sustainable development of sub-Saharan Africa and its challenges: A systematic review of evidence from Ethiopia. Journal of Innovation and Entrepreneurship, 11(1), Article 20. https://doi.org/10.1186/s13731-022-00221-8
Flynn, B. B., Huo, B., & Zhao, X. (2010). The impact of supply chain integration on performance: A contingency and configuration approach. Journal of Operations Management, 28(1), 58–71. https://doi.org/10.1016/j.jom.2009.06.001
Frohlich, M. T. (2002). Techniques for improving response rates in OM survey research. Journal of Operations Management, 20(1), 53–62. https://doi.org/10.1016/S0272-6963(02)00003-7
Gölgeci, I., & Kuivalainen, O. (2020). Does social capital matter for supply chain resilience? The role of absorptive capacity and marketing-supply chain management alignment. Industrial Marketing Management, 84, 63–74. https://doi.org/10.1016/j.indmarman.2019.05.006
Gomes, G., & Wojahn, R. M. (2017). Organizational learning capability, innovation and performance: Study in small and medium-sized enterprises (SMES). Revista de Administração, 52(2), 163–175. https://doi.org/10.1016/j.rausp.2016.12.003
Hair, J. F., Jr., Black, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate data analysis (8th ed.). Cengage.
Hacklin, F., Björkdahl, J., & Wallin, M. W. (2018). Strategies for business model innovation: How firms reel in migrating value. Long Range Planning, 51(1), 82–110. https://doi.org/10.1016/j.lrp.2017.06.009
Han, J. K., Kim, N., & Srivastava, R. K. (1998). Market orientation and organizational performance: Is innovation a missing link? Journal of Marketing, 62(4), 30–45. https://doi.org/10.1177/002224299806200403
Hilmersson, M. (2014). Small and medium-sized enterprise internationalisation strategy and performance in times of market turbulence. International Small Business Journal, 32(4), 386–400. https://doi.org/10.1177/0266242613497744
Huo, B., Qi, Y., Wang, Z., & Zhao, X. (2014). The impact of supply chain integration on firm performance: The moderating role of competitive strategy. Supply Chain Management, 19(4), 369–384. https://doi.org/10.1108/SCM-03-2013-0096
Issau, K., Acquah, I. S. K., Gnankob, R. I., & Hamidu, Z. (2021). Innovation orientation and performance of small and medium-sized enterprises (SMES) in Ghana: Evidence from manufacturing sector. Innovation & Management Review, 19(4), 290–305. https://doi.org/10.1108/INMR-07-2020-0092
Islami, X. (2021a). The relation between human resource management practices, supply chain management practices and competitive strategy as strategic instruments and their impact on organizational performance in manufacturing industry [Doctoral thesis, “Ss. Cyril and Methodius” University in Skopje].
Islami, X. (2021b). How to integrate organizational instruments? The mediation of HRM practices effect on organizational performance by SCM practices. Production & Manufacturing Research, 9(1), 206–240. https://doi.org/10.1080/21693277.2021.1978007
Islami, X., & Mustafa, N. (2023). The role of internal human resource orchestration on firm performance. Journal of Information and Organizational Sciences, 47(1), 39–63. https://doi.org/10.31341/jios.47.1.3
Islami, X., & Topuzovska Latkovikj, M. (2022). There is time to be integrated: The relationship between SCM practices and organizational performance – The moderated role of competitive strategy. Cogent Business & Management, 9(1), Article 2010305. https://doi.org/10.1080/23311975.2021.2010305
Islami, X., Latkovikj, M. T., Drakulevski, L., & Popovska, M. B. (2023). Does competitive strategy moderate the linkage between HRM practices and firm performance? Management: Journal of Contemporary Management Issues, 28(1), 45–63. https://doi.org/10.30924/mjcmi.28.1.4
ITC. (2019). SME competitiveness outlook 2019: Big money for small business – Financing the sustainable development goals. International Trade Centre. https://www.intracen.org/resources/publications/sme-competitiveness-outlook-2019-big-money-for-small-business-financing-the
Khattak, A., Tabash, M. I., Yousaf, Z., Radulescu, M., Nassani, A. A., & Haffar, M. (2022). Towards innovation performance of SMEs: Investigating the role of digital platforms, innovation culture and frugal innovation in emerging economies. Journal of Entrepreneurship in Emerging Economies, 14(5), 796–811. https://doi.org/10.1108/JEEE-08-2021-0318
Koellinger, P. (2008). The relationship between technology, innovation, and firm performance – Empirical evidence from e-business in Europe. Research Policy, 37(8), 1317–1328. https://doi.org/10.1016/j.respol.2008.04.024
Kosovo Agency of Statistics. (n.d). https://ask.rks-gov.net/
Kutner, M. H., Nachtsheim, C. J., Neter, J., & Li, W. (2005). Applied linear statistical models (5th ed.). McGraw-Hill.
Le, D. V., Le, H. T. T., Pham, T. T., & Vo, L. V. (2023). Innovation and SMEs performance: Evidence from Vietnam. Applied Economic Analysis, 31(92), 90–108. https://doi.org/10.1108/AEA-04-2022-0121
Lee, R., Lee, J.-H., & Garrett, T. C. (2019). Synergy effects of innovation on firm performance. Journal of Business Research, 99(1), 507–515. https://doi.org/10.1016/j.jbusres.2017.08.032
Leung, T. Y., & Sharma, P. (2021). Differences in the impact of R&D intensity and R&D internationalization on firm performance – Mediating role of innovation performance. Journal of Business Research, 131, 81–91. https://doi.org/10.1016/j.jbusres.2021.03.060
Linton, J. D., & Walsh, S. T. (2008). A theory of innovation for process-based innovations such as nanotechnology. Technological Forecasting and Social Change, 75(5), 583–594. https://doi.org/10.1016/j.techfore.2007.02.005
Mairesse, J., & Mohnen, P. (2010). Using innovation surveys for econometric analysis. In B. H. Hall & N. Rosenberg (Eds.), Handbook of the economics of innovation (Vol. 2) (pp. 1129–1155). Elsevier. https://doi.org/10.1016/S0169-7218(10)02010-1
Martínez‐Ros, E., & Labeaga, J. M. (2009). Product and process innovation: Persistence and complementarities. European Management Review, 6(1), 64–75. https://doi.org/10.1057/emr.2009.4
Marzi, G., Dabić, M., Daim, T., & Garces, E. (2017). Product and process innovation in manufacturing firms: A 30-year bibliometric analysis. Scientometrics, 113(2), 673–704. https://doi.org/10.1007/s11192-017-2500-1
Mulolli, E. (2024). The impact of human resource management practices to financial and non-financial performance of SMEs in manufacturing industry [Doctoral thesis, Ss. Cyril and Methodius University, Skopje].
Mulolli, E., Boskovska, D., & Islami, X. (2020). The competitive role of human resource management strategies on SMEs in a transitional economy. International Journal of Multidisciplinary and Current Research, 8(4), 521–529.
Mustafa, N., Bajrami, A., & Islami, X. (2022). Electronic services management in local governance –Evidence from a transitional economy. International Journal of Sustainable Development and Planning, 17(2), 615–621. https://doi.org/10.18280/ijsdp.170226
Mytelka, L., & Farinelli, F. (2000). Local clusters, innovation systems and sustained competitiveness (UNU/INTECH Discussion Paper No. 2000-05). United Nations University.
Naudé, W., & Szirmai, A. (2013). Technological innovation, entrepreneurship, and development (Working Paper No. 2013/17). Maastricht School of Management.
Neagu, C. (2016). The importance and role of small and medium-sized businesses. Theoretical and Applied Economics, 23(3), 331–338.
Nemetz, P. L., & Fry, L. W. (1988). Flexible manufacturing organizations: Implications for strategy formulation and organization design. Academy of Management Review, 13(4), 627–638. https://doi.org/10.2307/258380
OECD. (2005). Oslo manual: Guidelines for collecting and interpreting innovation data (3rd ed.). OECD Publications. https://ec.europa.eu/eurostat/documents/3859598/5889925/OSLO-EN.PDF
OECD. (2009). Innovation in firms: A microeconomic perspective. OECD Publishing. https://www.oecd-ilibrary.org/science-and-technology/innovation-in-firms_9789264056213-en
OECD. (2018). Promoting innovation in established SMEs. In Strengthening SMEs and entrepreneurship for productivity and inclusive growth: OECD 2018 ministerial conference on SMEs (pp. 113–119). OECD Publishing. https://www.oecd-ilibrary.org/industry-and-services/strengthening-smes-and-entrepreneurship-for-productivity-and-inclusive-growth_650c36d4-en
Pett, T. L., & Wolff, J. A. (2009). SME opportunity for growth or profit: What is the role of product and process improvement? International Journal of Entrepreneurial Venturing, 1(1), 5–21. https://doi.org/10.1504/IJEV.2009.023817
Piening, E. P., & Salge, T. O. (2015). Understanding the antecedents, contingencies, and performance implications of process innovation: A dynamic capabilities perspective. Journal of Product Innovation Management, 32(1), 80–97. https://doi.org/10.1111/jpim.12225
Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903. https://doi.org/10.1037/0021-9010.88.5.879
Pwc. (2014). PWC 17th annual global CEO survey. https://www.pwc.com/gx/en/ceo-survey/2014/assets/pwc-17th-annual-global-ceo-survey-jan-2014.pdf
Qi, Y., Zhao, X., & Sheu, C. (2011). The impact of competitive strategy and supply chain strategy on business performance: The role of environmental uncertainty. Decision Sciences, 42(2), 371–¬389. https://doi.org/10.1111/j.1540-5915.2011.00315.x
Roach, D. C., Ryman, J. A., & Makani, J. (2016). Effectuation, innovation and performance in SMEs: An empirical study. European Journal of Innovation Management, 19(2), 214–238. https://doi.org/10.1108/EJIM-12-2014-0119
Rosli, M. M., & Sidek, S. (2013). The impact of innovation on the performance of small and medium manufacturing enterprises: Evidence from Malaysia. Journal of Innovation Management in Small & Medium Enterprises, 2013(2013), Article 885666. https://doi.org/10.5171/2013.885666
Rousseau, M. B., Mathias, B. D., Madden, L. T., & Crook, T. R. (2016). Innovation, firm performance, and appropriation: A meta-analysis. International Journal of Innovation Management, 20(03), Article 1650033. https://doi.org/10.1142/S136391961650033X
Rubera, G., & Kirca, A. H. (2012). Firm innovativeness and its performance outcomes: A meta-analytic Review and theoretical integration. Journal of Marketing, 76(3), 130–147. https://doi.org/10.1509/jm.10.0494
Santos, D. F. L., Basso, L. F. C., Kimura, H., & Kayo, E. K. (2014). Innovation efforts and performances of Brazilian firms. Journal of Business Research, 67(4), 527–535. https://doi.org/10.1016/j.jbusres.2013.11.009
Shi, J., Mo, X., & Sun, Z. (2012). Content validity index in scale development. Journal of Central South University (Medical Science), 37(2), 152–155. https://doi.org/10.3969/j.issn.1672-7347.2012.02.007
Shouyu, C. (2017). The relationship between innovation and firm performance: A literature review. Proceedings of the 2017 7th International Conference on Social Network, Communication and Education (SNCE 2017) (pp. 648–652). Atlantis Press. https://doi.org/10.2991/snce-17.2017.132
Soni, G., Mangla, S. K., Singh, P., Dey, B. L., & Dora, M. (2021). Technological interventions in social business: Mapping current research and establishing future research agenda. Technological Forecasting and Social Change, 169, Article 120818. https://doi.org/10.1016/j.techfore.2021.120818
Terjesen, S. A., Guedes, M. J., & Patel, P. C. (2016). Founded in adversity: Operations-based survival strategies of ventures founded during a recession. International Journal of Production Economics, 173(1), 161–169. https://doi.org/10.1016/j.ijpe.2015.12.001
Tsinopoulos, C., Sousa, C. M. P., & Yan, J. (2018). Process innovation: Open innovation and the moderating role of the motivation to achieve legitimacy. Journal of Product Innovation Management, 35(1), 27–48. https://doi.org/10.1111/jpim.12374
Un, C. A., & Asakawa, K. (2015). Types of R&D collaborations and process innovation: The benefit of collaborating upstream in the knowledge chain. Journal of Product Innovation Management, 32(1), 138–153. https://doi.org/10.1111/jpim.12229
Varis, M., & Littunen, H. (2010). Types of innovation, sources of information and performance in entrepreneurial SMEs. European Journal of Innovation Management, 13(2), 128–154. https://doi.org/10.1108/14601061011040221
Vithessonthi, C., & Racela, O. C. (2016). Short- and long-run effects of internationalization and R&D intensity on firm performance. Journal of Multinational Financial Management, 34, 28–45. https://doi.org/10.1016/j.mulfin.2015.12.001
Wamuyu, P. K. (2015). The impact of information and communication technology adoption and diffusion on technology entrepreneurship in developing countries: The case of Kenya. Information Technology for Development, 21(2), 253–280. https://doi.org/10.1080/02681102.2014.948372
Weerawardena, J. (2003). The role of marketing capability in innovation-based competitive strategy. Journal of Strategic Marketing, 11(1), 15–35. https://doi.org/10.1080/0965254032000096766
World Bank Group. (2019). Small and medium enterprises (SMEs) finance. Improving SMEs’ access to finance and finding innovative solutions to unlock source of capital. Retrieved March 6, 2024, from https://www.worldbank.org/en/topic/smefinance
Xu, J., Shang, Y., Yu, W., & Liu, F. (2019). Intellectual capital, technological innovation and firm performance: Evidence from China’s manufacturing sector. Sustainability, 11(19), Article 5328. https://doi.org/10.3390/su11195328
Yeh-Yun Lin, C., & Yi-Ching Chen, M. (2007). Does innovation lead to performance? An empirical study of SMEs in Taiwan. Management Research News, 30(2), 115–132. https://doi.org/10.1108/01409170710722955
Zhang, H., & Aumeboonsuke, V. (2022). Technological innovation, risk-taking and firm performance – Empirical evidence from Chinese listed companies. Sustainability, 14(22), Article 14688. https://doi.org/10.3390/su142214688
Zhou, K. Z. (2006). Innovation, imitation, and new product performance: The case of China. Industrial Marketing Management, 35(3), 394–402. https://doi.org/10.1016/j.indmarman.2005.10.006
Acquaah, M. (2007). Managerial social capital, strategic orientation, and organizational performance in an emerging economy. Strategic Management Journal, 28(12), 1235–1255. https://doi.org/10.1002/smj.632
Akram, K., Siddiqui, S. H., Nawaz, M. A., Ghauri, T. A., & Cheema, A. K. H. (2011). Role of knowledge management to bring innovation: An integrated approach. Celt: A Journal of Culture, English Language Teaching & Literature, 92(333), Article 6183035.
Alam, K., & Adeyinka, A. A. (2021). Does innovation stimulate performance? The case of small and medium enterprises in regional Australia. Australian Economic Papers, 60(3), 496–519. https://doi.org/10.1111/1467-8454.12216
Aliasghar, O., Sadeghi, A., & Rose, E. L. (2023). Process innovation in small-and medium-sized enterprises: The critical roles of external knowledge sourcing and absorptive capacity. Journal of Small Business Management, 61(4), 1583–1610. https://doi.org/10.1080/00472778.2020.1844491
Alves, I., & Lourenço, S. M. (2022). The use of non-financial performance measures for managerial compensation: Evidence from SMEs. Journal of Management Control, 33(2), 151–187. https://doi.org/10.1007/s00187-022-00337-8
Ameen, N. A., & Willis, R. (2016). The use of mobile phones to support women’s entrepreneurship in the Arab countries. International Journal of Gender and Entrepreneurship, 8(4), 424–445. https://doi.org/10.1108/IJGE-10-2015-0037
Ayandibu, A. O., & Houghton, J. (2017). The role of small and medium scale enterprise in local economic development (LED). Journal of Business and Retail Management Research, 11(2), 133–139.
Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2011). Firm innovation in emerging markets: The role of finance, governance, and competition. Journal of Financial and Quantitative Analysis, 46(6), 1545–1580. https://doi.org/10.1017/S0022109011000378
Battisti, G., & Stoneman, P. (2010). How innovative are UK firms? Evidence from the fourth UK community innovation survey on synergies between technological and organizational innovations. British Journal of Management, 21(1), 187–206. https://doi.org/10.1111/j.1467-8551.2009.00629.x
Bigliardi, B. (2013). The effect of innovation on financial performance: A research study involving SMEs. Innovation, 15(2), 245–255. https://doi.org/10.5172/impp.2013.15.2.245
Birkinshaw, J., Hamel, G., & Mol, M. J. (2008). Management innovation. Academy of Management Review, 33(4), 825–845. https://doi.org/10.5465/amr.2008.34421969
Bustinza, O. F., Gomes, E., Vendrell‐Herrero, F., & Baines, T. (2019). Product–service innovation and performance: The role of collaborative partnerships and R&D intensity. R & D Management, 49(1), 33–45. https://doi.org/10.1111/radm.12269
Cao, S., Nie, L., Sun, H., Sun, W., & Taghizadeh-Hesary, F. (2021). Digital finance, green technological innovation and energy-environmental performance: Evidence from China’s regional economies. Journal of Cleaner Production, 327, Article 129458. https://doi.org/10.1016/j.jclepro.2021.129458
Casals, F. E. (2011). The SME co-operation framework: A multi-method secondary research approach to SME collaboration. 2010 International Conference on E-business, Management and Economics IPEDR, 3(1), 118–124.
Chege, S. M., & Wang, D. (2020). The influence of technology innovation on SME performance through environmental sustainability practices in Kenya. Technology in Society, 60, Article 101210. https://doi.org/10.1016/j.techsoc.2019.101210
Chege, S. M., Wang, D., & Suntu, S. L. (2020). Impact of information technology innovation on firm performance in Kenya. Information Technology for Development, 26(2), 316–345. https://doi.org/10.1080/02681102.2019.1573717
Çütçü, I., & Bozan, T. (2019). Inovasyon ve ekonomik büyüme ilişkisi: G7 ülkeleri üzerini panel veri analizi [The relationship between innovation and economic growth: Panel data analysis on G7 countries. Uluslararası Ekonomi İşletme ve Politika Dergisi, 3(2), 289–310. https://doi.org/10.29216/ueip.607662
De Jong, J. P. J., & Marsili, O. (2006). The fruit flies of innovations: A taxonomy of innovative small firms. Research Policy, 35(2), 213–229. https://doi.org/10.1016/j.respol.2005.09.007
De Jong, J. P. J., & Vermeulen, P. A. M. (2006). Determinants of product innovation in small firms: A comparison across industries. International Small Business Journal, 24(6), 587–609. https://doi.org/10.1177/0266242606069268
Dunk, A. S. (2011). Product innovation, budgetary control, and the financial performance of firms. The British Accounting Review, 43(2), 102–111. https://doi.org/10.1016/j.bar.2011.02.004
Endris, E., & Kassegn, A. (2022). The role of micro, small and medium enterprises (MSMEs) to the sustainable development of sub-Saharan Africa and its challenges: A systematic review of evidence from Ethiopia. Journal of Innovation and Entrepreneurship, 11(1), Article 20. https://doi.org/10.1186/s13731-022-00221-8
Flynn, B. B., Huo, B., & Zhao, X. (2010). The impact of supply chain integration on performance: A contingency and configuration approach. Journal of Operations Management, 28(1), 58–71. https://doi.org/10.1016/j.jom.2009.06.001
Frohlich, M. T. (2002). Techniques for improving response rates in OM survey research. Journal of Operations Management, 20(1), 53–62. https://doi.org/10.1016/S0272-6963(02)00003-7
Gölgeci, I., & Kuivalainen, O. (2020). Does social capital matter for supply chain resilience? The role of absorptive capacity and marketing-supply chain management alignment. Industrial Marketing Management, 84, 63–74. https://doi.org/10.1016/j.indmarman.2019.05.006
Gomes, G., & Wojahn, R. M. (2017). Organizational learning capability, innovation and performance: Study in small and medium-sized enterprises (SMES). Revista de Administração, 52(2), 163–175. https://doi.org/10.1016/j.rausp.2016.12.003
Hair, J. F., Jr., Black, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate data analysis (8th ed.). Cengage.
Hacklin, F., Björkdahl, J., & Wallin, M. W. (2018). Strategies for business model innovation: How firms reel in migrating value. Long Range Planning, 51(1), 82–110. https://doi.org/10.1016/j.lrp.2017.06.009
Han, J. K., Kim, N., & Srivastava, R. K. (1998). Market orientation and organizational performance: Is innovation a missing link? Journal of Marketing, 62(4), 30–45. https://doi.org/10.1177/002224299806200403
Hilmersson, M. (2014). Small and medium-sized enterprise internationalisation strategy and performance in times of market turbulence. International Small Business Journal, 32(4), 386–400. https://doi.org/10.1177/0266242613497744
Huo, B., Qi, Y., Wang, Z., & Zhao, X. (2014). The impact of supply chain integration on firm performance: The moderating role of competitive strategy. Supply Chain Management, 19(4), 369–384. https://doi.org/10.1108/SCM-03-2013-0096
Issau, K., Acquah, I. S. K., Gnankob, R. I., & Hamidu, Z. (2021). Innovation orientation and performance of small and medium-sized enterprises (SMES) in Ghana: Evidence from manufacturing sector. Innovation & Management Review, 19(4), 290–305. https://doi.org/10.1108/INMR-07-2020-0092
Islami, X. (2021a). The relation between human resource management practices, supply chain management practices and competitive strategy as strategic instruments and their impact on organizational performance in manufacturing industry [Doctoral thesis, “Ss. Cyril and Methodius” University in Skopje].
Islami, X. (2021b). How to integrate organizational instruments? The mediation of HRM practices effect on organizational performance by SCM practices. Production & Manufacturing Research, 9(1), 206–240. https://doi.org/10.1080/21693277.2021.1978007
Islami, X., & Mustafa, N. (2023). The role of internal human resource orchestration on firm performance. Journal of Information and Organizational Sciences, 47(1), 39–63. https://doi.org/10.31341/jios.47.1.3
Islami, X., & Topuzovska Latkovikj, M. (2022). There is time to be integrated: The relationship between SCM practices and organizational performance – The moderated role of competitive strategy. Cogent Business & Management, 9(1), Article 2010305. https://doi.org/10.1080/23311975.2021.2010305
Islami, X., Latkovikj, M. T., Drakulevski, L., & Popovska, M. B. (2023). Does competitive strategy moderate the linkage between HRM practices and firm performance? Management: Journal of Contemporary Management Issues, 28(1), 45–63. https://doi.org/10.30924/mjcmi.28.1.4
ITC. (2019). SME competitiveness outlook 2019: Big money for small business – Financing the sustainable development goals. International Trade Centre. https://www.intracen.org/resources/publications/sme-competitiveness-outlook-2019-big-money-for-small-business-financing-the
Khattak, A., Tabash, M. I., Yousaf, Z., Radulescu, M., Nassani, A. A., & Haffar, M. (2022). Towards innovation performance of SMEs: Investigating the role of digital platforms, innovation culture and frugal innovation in emerging economies. Journal of Entrepreneurship in Emerging Economies, 14(5), 796–811. https://doi.org/10.1108/JEEE-08-2021-0318
Koellinger, P. (2008). The relationship between technology, innovation, and firm performance – Empirical evidence from e-business in Europe. Research Policy, 37(8), 1317–1328. https://doi.org/10.1016/j.respol.2008.04.024
Kosovo Agency of Statistics. (n.d). https://ask.rks-gov.net/
Kutner, M. H., Nachtsheim, C. J., Neter, J., & Li, W. (2005). Applied linear statistical models (5th ed.). McGraw-Hill.
Le, D. V., Le, H. T. T., Pham, T. T., & Vo, L. V. (2023). Innovation and SMEs performance: Evidence from Vietnam. Applied Economic Analysis, 31(92), 90–108. https://doi.org/10.1108/AEA-04-2022-0121
Lee, R., Lee, J.-H., & Garrett, T. C. (2019). Synergy effects of innovation on firm performance. Journal of Business Research, 99(1), 507–515. https://doi.org/10.1016/j.jbusres.2017.08.032
Leung, T. Y., & Sharma, P. (2021). Differences in the impact of R&D intensity and R&D internationalization on firm performance – Mediating role of innovation performance. Journal of Business Research, 131, 81–91. https://doi.org/10.1016/j.jbusres.2021.03.060
Linton, J. D., & Walsh, S. T. (2008). A theory of innovation for process-based innovations such as nanotechnology. Technological Forecasting and Social Change, 75(5), 583–594. https://doi.org/10.1016/j.techfore.2007.02.005
Mairesse, J., & Mohnen, P. (2010). Using innovation surveys for econometric analysis. In B. H. Hall & N. Rosenberg (Eds.), Handbook of the economics of innovation (Vol. 2) (pp. 1129–1155). Elsevier. https://doi.org/10.1016/S0169-7218(10)02010-1
Martínez‐Ros, E., & Labeaga, J. M. (2009). Product and process innovation: Persistence and complementarities. European Management Review, 6(1), 64–75. https://doi.org/10.1057/emr.2009.4
Marzi, G., Dabić, M., Daim, T., & Garces, E. (2017). Product and process innovation in manufacturing firms: A 30-year bibliometric analysis. Scientometrics, 113(2), 673–704. https://doi.org/10.1007/s11192-017-2500-1
Mulolli, E. (2024). The impact of human resource management practices to financial and non-financial performance of SMEs in manufacturing industry [Doctoral thesis, Ss. Cyril and Methodius University, Skopje].
Mulolli, E., Boskovska, D., & Islami, X. (2020). The competitive role of human resource management strategies on SMEs in a transitional economy. International Journal of Multidisciplinary and Current Research, 8(4), 521–529.
Mustafa, N., Bajrami, A., & Islami, X. (2022). Electronic services management in local governance –Evidence from a transitional economy. International Journal of Sustainable Development and Planning, 17(2), 615–621. https://doi.org/10.18280/ijsdp.170226
Mytelka, L., & Farinelli, F. (2000). Local clusters, innovation systems and sustained competitiveness (UNU/INTECH Discussion Paper No. 2000-05). United Nations University.
Naudé, W., & Szirmai, A. (2013). Technological innovation, entrepreneurship, and development (Working Paper No. 2013/17). Maastricht School of Management.
Neagu, C. (2016). The importance and role of small and medium-sized businesses. Theoretical and Applied Economics, 23(3), 331–338.
Nemetz, P. L., & Fry, L. W. (1988). Flexible manufacturing organizations: Implications for strategy formulation and organization design. Academy of Management Review, 13(4), 627–638. https://doi.org/10.2307/258380
OECD. (2005). Oslo manual: Guidelines for collecting and interpreting innovation data (3rd ed.). OECD Publications. https://ec.europa.eu/eurostat/documents/3859598/5889925/OSLO-EN.PDF
OECD. (2009). Innovation in firms: A microeconomic perspective. OECD Publishing. https://www.oecd-ilibrary.org/science-and-technology/innovation-in-firms_9789264056213-en
OECD. (2018). Promoting innovation in established SMEs. In Strengthening SMEs and entrepreneurship for productivity and inclusive growth: OECD 2018 ministerial conference on SMEs (pp. 113–119). OECD Publishing. https://www.oecd-ilibrary.org/industry-and-services/strengthening-smes-and-entrepreneurship-for-productivity-and-inclusive-growth_650c36d4-en
Pett, T. L., & Wolff, J. A. (2009). SME opportunity for growth or profit: What is the role of product and process improvement? International Journal of Entrepreneurial Venturing, 1(1), 5–21. https://doi.org/10.1504/IJEV.2009.023817
Piening, E. P., & Salge, T. O. (2015). Understanding the antecedents, contingencies, and performance implications of process innovation: A dynamic capabilities perspective. Journal of Product Innovation Management, 32(1), 80–97. https://doi.org/10.1111/jpim.12225
Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903. https://doi.org/10.1037/0021-9010.88.5.879
Pwc. (2014). PWC 17th annual global CEO survey. https://www.pwc.com/gx/en/ceo-survey/2014/assets/pwc-17th-annual-global-ceo-survey-jan-2014.pdf
Qi, Y., Zhao, X., & Sheu, C. (2011). The impact of competitive strategy and supply chain strategy on business performance: The role of environmental uncertainty. Decision Sciences, 42(2), 371–¬389. https://doi.org/10.1111/j.1540-5915.2011.00315.x
Roach, D. C., Ryman, J. A., & Makani, J. (2016). Effectuation, innovation and performance in SMEs: An empirical study. European Journal of Innovation Management, 19(2), 214–238. https://doi.org/10.1108/EJIM-12-2014-0119
Rosli, M. M., & Sidek, S. (2013). The impact of innovation on the performance of small and medium manufacturing enterprises: Evidence from Malaysia. Journal of Innovation Management in Small & Medium Enterprises, 2013(2013), Article 885666. https://doi.org/10.5171/2013.885666
Rousseau, M. B., Mathias, B. D., Madden, L. T., & Crook, T. R. (2016). Innovation, firm performance, and appropriation: A meta-analysis. International Journal of Innovation Management, 20(03), Article 1650033. https://doi.org/10.1142/S136391961650033X
Rubera, G., & Kirca, A. H. (2012). Firm innovativeness and its performance outcomes: A meta-analytic Review and theoretical integration. Journal of Marketing, 76(3), 130–147. https://doi.org/10.1509/jm.10.0494
Santos, D. F. L., Basso, L. F. C., Kimura, H., & Kayo, E. K. (2014). Innovation efforts and performances of Brazilian firms. Journal of Business Research, 67(4), 527–535. https://doi.org/10.1016/j.jbusres.2013.11.009
Shi, J., Mo, X., & Sun, Z. (2012). Content validity index in scale development. Journal of Central South University (Medical Science), 37(2), 152–155. https://doi.org/10.3969/j.issn.1672-7347.2012.02.007
Shouyu, C. (2017). The relationship between innovation and firm performance: A literature review. Proceedings of the 2017 7th International Conference on Social Network, Communication and Education (SNCE 2017) (pp. 648–652). Atlantis Press. https://doi.org/10.2991/snce-17.2017.132
Soni, G., Mangla, S. K., Singh, P., Dey, B. L., & Dora, M. (2021). Technological interventions in social business: Mapping current research and establishing future research agenda. Technological Forecasting and Social Change, 169, Article 120818. https://doi.org/10.1016/j.techfore.2021.120818
Terjesen, S. A., Guedes, M. J., & Patel, P. C. (2016). Founded in adversity: Operations-based survival strategies of ventures founded during a recession. International Journal of Production Economics, 173(1), 161–169. https://doi.org/10.1016/j.ijpe.2015.12.001
Tsinopoulos, C., Sousa, C. M. P., & Yan, J. (2018). Process innovation: Open innovation and the moderating role of the motivation to achieve legitimacy. Journal of Product Innovation Management, 35(1), 27–48. https://doi.org/10.1111/jpim.12374
Un, C. A., & Asakawa, K. (2015). Types of R&D collaborations and process innovation: The benefit of collaborating upstream in the knowledge chain. Journal of Product Innovation Management, 32(1), 138–153. https://doi.org/10.1111/jpim.12229
Varis, M., & Littunen, H. (2010). Types of innovation, sources of information and performance in entrepreneurial SMEs. European Journal of Innovation Management, 13(2), 128–154. https://doi.org/10.1108/14601061011040221
Vithessonthi, C., & Racela, O. C. (2016). Short- and long-run effects of internationalization and R&D intensity on firm performance. Journal of Multinational Financial Management, 34, 28–45. https://doi.org/10.1016/j.mulfin.2015.12.001
Wamuyu, P. K. (2015). The impact of information and communication technology adoption and diffusion on technology entrepreneurship in developing countries: The case of Kenya. Information Technology for Development, 21(2), 253–280. https://doi.org/10.1080/02681102.2014.948372
Weerawardena, J. (2003). The role of marketing capability in innovation-based competitive strategy. Journal of Strategic Marketing, 11(1), 15–35. https://doi.org/10.1080/0965254032000096766
World Bank Group. (2019). Small and medium enterprises (SMEs) finance. Improving SMEs’ access to finance and finding innovative solutions to unlock source of capital. Retrieved March 6, 2024, from https://www.worldbank.org/en/topic/smefinance
Xu, J., Shang, Y., Yu, W., & Liu, F. (2019). Intellectual capital, technological innovation and firm performance: Evidence from China’s manufacturing sector. Sustainability, 11(19), Article 5328. https://doi.org/10.3390/su11195328
Yeh-Yun Lin, C., & Yi-Ching Chen, M. (2007). Does innovation lead to performance? An empirical study of SMEs in Taiwan. Management Research News, 30(2), 115–132. https://doi.org/10.1108/01409170710722955
Zhang, H., & Aumeboonsuke, V. (2022). Technological innovation, risk-taking and firm performance – Empirical evidence from Chinese listed companies. Sustainability, 14(22), Article 14688. https://doi.org/10.3390/su142214688
Zhou, K. Z. (2006). Innovation, imitation, and new product performance: The case of China. Industrial Marketing Management, 35(3), 394–402. https://doi.org/10.1016/j.indmarman.2005.10.006