Different Routes, Same Goal: Exploring the Impact of Innovation Policy Tools on SMEs’ Persistent Innovation—A Hybrid Study Using SEM and fsQCA

Persistent innovation in enterprises poses a formidable challenge that requires a comprehensive understanding of internal and external drivers. While prior research has predominantly examined internal innovation behaviors and strategies, a gap remains in the understanding of the role of external factors, particularly innovation policy tools, in fostering persistent innovation. Hence, this study presents a novel approach by formulating research hypotheses that leverage the existing literature and conducts a questionnaire survey involving 446 small and medium-sized enterprises (SMEs) in mainland China. It empirically examines the intricate relationships among innovation policy tools, resource bricolage, environmental turbulence, and SMEs’ persistent innovation using structural equation modeling and qualitative comparative analysis. The findings highlight that regulatory, economic, and information-based policy tools positively influence persistent innovation, with information-based tools having the most significant impact. Resource bricolage and environmental turbulence mediate and moderate the relationship between innovation policy tools and persistent innovation. Consequently, the present study identifies four distinct combinations of policy tools that promote persistent innovation among SMEs. Fundamentally, this study sheds light on the mechanisms through which innovation policy tools shape persistent innovation, offering theoretical insights and practical implications for refining innovation policies and optimizing their design of innovation policy tools.