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Effect of entrepreneurial orientation on radical innovation performance among manufacturing SMEs: the mediating role of absorptive capacity

Sampson Ato Sarsah (School of Management, Jiangsu University, Zhenjiang, China)
Hongyun Tian (School of Management, Jiangsu University, Zhenjiang, China)
Courage Simon Kofi Dogbe (School of Management, Jiangsu University, Zhenjiang, China)
Bylon Abeeku Bamfo (School of Business, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)
Wisdom Wise Kwabla Pomegbe (School of Management, Jiangsu University, Zhenjiang, China)

Journal of Strategy and Management

ISSN: 1755-425X

Article publication date: 4 September 2020

Issue publication date: 13 October 2020

1094

Abstract

Purpose

The study explored the mediating role of potential and realized absorptive capacities in the relationship between entrepreneurial orientation and radical innovation performance among manufacturing small and medium-sized enterprises (SMEs).

Design/methodology/approach

Empirical analysis was based on 357 manufacturing SMEs in Ghana. Various validity and reliability checks were conducted before the presentation of the actual analysis, which was conducted using ordinary least squares approach, run using SPSS (v. 20).

Findings

Findings revealed that potential and realized absorptive capacities significantly mediated the relationship between entrepreneurial orientation and radical innovation performance among manufacturing SMEs. Further, it was identified that ambidexterity in absorptive capacity also had a greater effect on radical innovation performance among manufacturing SMEs.

Research limitations/implications

Since the data used were cross-sectional, the relationships measured represent only a snapshot of time. Longitudinal studies could therefore be adopted in the future to complement the cross-sectional conducted.

Practical implications

While managers of manufacturing SMEs seek to achieve higher radical innovation performance through entrepreneurial orientation, it should also be noted that both potential and realized absorptive capacities have a significant role to play in this relationship. Managers must therefore also seek to invest time to build both potential and realized absorptive capacities, as they define greater innovation success.

Originality/value

Some past studies have considered absorptive capacity as composite variable, therefore added both potential and realized absorptive capacities to form a single variable. Others also presented potential and realized absorptive capacities individually. This current study extends the body of knowledge by presenting an ambidexterity position between potential and realized absorptive capacities.

Keywords

Acknowledgements

The National Social Science Foundation of China (14BGL024): Research on the open innovation mechanism and promotional policy of small and medium-sized enterprises from the perspective of Network Embeddedness.Senior talent project of Jiangsu University (08JDG055): Disruptive innovation and construction of SMEs dynamic competitive advantage.

Citation

Ato Sarsah, S., Tian, H., Dogbe, C.S.K., Bamfo, B.A. and Pomegbe, W.W.K. (2020), "Effect of entrepreneurial orientation on radical innovation performance among manufacturing SMEs: the mediating role of absorptive capacity", Journal of Strategy and Management, Vol. 13 No. 4, pp. 551-570. https://doi.org/10.1108/JSMA-03-2020-0053

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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