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Small Business Economics

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01.10.2013

Disentangling the effects of organizational capabilities, innovation and firm size on SME sales growth

verfasst von: Lorraine M. Uhlaner, André van Stel, Valérie Duplat, Haibo Zhou

Erschienen in: Small Business Economics | Ausgabe 3/2013

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Abstract

This paper focuses on certain drivers of SME sales growth related to knowledge and innovation. Building on the dynamic capabilities literature, we test whether two organizational capabilities (external sourcing and employee involvement in renewal activities) predict sales growth, and if so, whether such effects are mediated by process and/or product innovation. Based on survey data from a panel study of Dutch SMEs, and controlling for several firm characteristics (firm size, sector, age and family business), we conclude that external sourcing has direct effects on both product and process innovation, with an indirect effect (mediated by process innovation) on sales growth. In line with our hypothesis development, we also find that employee involvement, while positively affecting process innovation, has a negative effect on sales growth. Firm size moderates the effects of two of the variables (external sourcing and product innovation) on sales growth, with more positive effects found for the smallest firms, results supporting the nimbleness (versus resource-based) view.

Vorheriger Artikel Influence of family ownership on small business growth. Evidence from French SMEs

Nächster Artikel Reconciling quantile autoregressions of firm size and variance–size scaling

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Eisenhardt and Martin (2000) define dynamic capabilities as the “antecedent organizational and strategic routines by which managers alter their resource base—acquire and shed resources, integrate them together and recombine them—to generate new value-creating strategies” (Eisenhardt and Martin 2000, p. 1107).

The panel was not asked these questions in 2001.

Despite a high correlation, low VIF scores (<2) were found when both items were included in the same regression analysis, indicating low multicollinearity. Furthermore, the contribution of each item to sales growth differed (negative for employee involvement and non-significant for process innovation, regardless of the order in which the items were entered into the model), suggesting the need to treat them as separate items. This is consistent with content analysis reflecting one item as input and the other as innovation output.

Extreme values for individual periods—annual growths rates of more than 100 % or less than − 50 %—were removed. In these cases, the average annual growth rate was computed over the remaining periods. By removing outlier values, we correct for business-cycle effects (i.e., years of incidentally high or low sales growth).

Data available from the authors.

More detailed data on the VIF scores are available upon request.

In an analysis not shown, process innovation 1999 does not explain significant variance in average sales growth. Given the lack of a normal distribution and a high correlation with employee involvement 1999, we decided it would be better to use the Process Innovation 2000 indicator in the model.

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Titel: Disentangling the effects of organizational capabilities, innovation and firm size on SME sales growth
verfasst von: Lorraine M. Uhlaner
André van Stel
Valérie Duplat
Haibo Zhou
Publikationsdatum: 01.10.2013
Verlag: Springer US
Erschienen in: Small Business Economics / Ausgabe 3/2013
Print ISSN: 0921-898X
Elektronische ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-012-9455-7

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