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Antecedents of Service Innovation in SMEs: Comparing the Effects of External and Internal Factors

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  • Daniel Prajogo
  • Christopher M. Mcdermott

Abstract

Increasing attention has been paid of late to the importance of effectively developing both exploratory and exploitative innovation in firms. Small and medium‐sized enterprises (SMEs) play a significant role in the growth of economies and in job creation, yet at the same time they can differ significantly from larger firms with respect to effective management. Recent research has examined the effects of environmental and organizational characteristics on the effective development of exploratory and exploitative innovation. SMEs differ from larger firms in many ways, such as the availability of resources, and it is unclear whether findings based on studies in larger firms will also hold true for SMEs. As such, it is important to explore and understand the extent to which SMEs differ from large firms in this important area. Specifically, this paper empirically examines the extent to which organizational factors (connectedness, centralization, formalization) and business environment (dynamism and hostility) are associated with different types of innovation orientations (exploratory and exploitative) among SMEs.

Suggested Citation

  • Daniel Prajogo & Christopher M. Mcdermott, 2014. "Antecedents of Service Innovation in SMEs: Comparing the Effects of External and Internal Factors," Journal of Small Business Management, Taylor & Francis Journals, vol. 52(3), pages 521-540, July.
  • Handle: RePEc:taf:ujbmxx:v:52:y:2014:i:3:p:521-540
    DOI: 10.1111/jsbm.12047
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    Cited by:

    1. Rubio-Andrés, Mercedes & Ramos-González, Mª del Mar & Sastre-Castillo, Miguel Ángel & Gutiérrez-Broncano, Santiago, 2023. "Stakeholder pressure and innovation capacity of SMEs in the COVID-19 pandemic: Mediating and multigroup analysis," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    2. Jiuling Xiao & Yuting Bao & Jiankang Wang, 2023. "Which neighbor is more conducive to innovation? The moderating effect of partners’ innovation," The Journal of Technology Transfer, Springer, vol. 48(1), pages 33-67, February.
    3. Curado Carla & Gonçalves Tiago & Brito João Costa, 2022. "Understanding the HRM systems double contribution to radical and incremental innovation in SMEs: A configurational approach," Journal of Economics and Management, Sciendo, vol. 44(1), pages 315-343, January.
    4. Wei, Zelong & Huang, Wengao & Wang, Yanping & Sun, Lulu, 2022. "When does servitization promote product innovation? The moderating roles of product modularization and organization formalization," Technovation, Elsevier, vol. 117(C).

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