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Effect of innovation on firm competitiveness: the case of manufacturing SMEs in Nairobi County, Kenya

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  • Mary Nafula Kiveu
  • Mary Namusonge
  • Stephen Muathe

Abstract

Innovation is widely acknowledged as one of the key factors in firm competitiveness and has become prominent in SMEs' strategies and government policy. However empirical studies linking innovation to competitiveness are very limited. The aim of this study was to analyse the effect of innovation on firm competitiveness in manufacturing SMEs in Nairobi County, Kenya. Data was collected from a sample of 284 enterprises for the period 2012-2014. Multiple linear regression was used to analyse the effect of innovation on competitiveness. Findings indicate 97% of the manufacturing SMEs were innovating with majority implementing incremental innovations. Process, marketing and organisational innovations had positive significant effect on competitiveness, while product innovation had positive non-significant effect. The study recommends the implementation of innovations with high novelty by SMEs to increase their competitiveness. This can be facilitated by SMEs forming linkages and cooperating in innovation with knowledge generating institutions.

Suggested Citation

  • Mary Nafula Kiveu & Mary Namusonge & Stephen Muathe, 2019. "Effect of innovation on firm competitiveness: the case of manufacturing SMEs in Nairobi County, Kenya," International Journal of Business Innovation and Research, Inderscience Enterprises Ltd, vol. 18(3), pages 307-327.
    • Handle: RePEc:ids:ijbire:v:18:y:2019:i:3:p:307-327
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    Citations

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    Cited by:

    1. Suhana Mohezar & Ainin Sulaiman & Mohammad Nazri & Safiah Omar, 2020. "Sustaining innovative capabilities of light emitting diode (led) manufacturers through dynamic entrepreneurship," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 1095-1107, September.
    2. Samuel Amponsah Odei & Ivan Soukal, 2024. "Business strategies, bureaucratic ties, and firms’ innovation novelty: insights from the World Bank enterprise survey," Journal of Innovation and Entrepreneurship, Springer, vol. 13(1), pages 1-23, December.
    3. Adesola Adebayo Akande & Olusayo Rotimi-Bimbo & Toyon Ebitei Robert, 2024. "Financial Management Information Designs and Product Innovations Sustainability in Developing Economy-Using Ambidexterity Model," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(7), pages 1784-1795, July.
    4. Eunice Dushime & Stephen Muathe & Lucy Kavindah, 2022. "New paradigms on performance of SMEs:The reflection on entrepreneurial innovation in Burundi," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(1), pages 24-32, January.
    5. Marija Slutej, 2021. "Prejudice between Educators," Economy for a New Normal: Digitalisation and Human Relations in Business and Education,, ToKnowPress.
    6. Jehad Bani Hani, 2021. "The Impact of Human Resource Planning (HRP) in Achieving the Strategic Goal of the Firm With the Moderating Role of Organizational Innovation," International Journal of System Dynamics Applications (IJSDA), IGI Global, vol. 10(4), pages 1-22, October.
    7. Stephen Makau Muathe & Eunice Dushime & Lucy Kavindah, 2023. "Elevating SMEs Performance through Entrepreneurial Innovation and Government Regulations in Bujumbura, Burundi," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(5), pages 194-208, May.
    8. Sajjad Vojdanian, 2022. "The Effect of Knowledge Management on SMEs' Competitiveness," Digital Transformation: The Harmonic Convergence of People, Culture, Process, and Technology in the New Normal,, ToKnowPress.

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