Determinants for innovation implementation at SME and inter SME levels within peripheral regions

Research output: Contribution to journalArticle

22 Citations (Scopus)

Abstract

Purpose - Innovation efforts of small- or medium-sized enterprises (SMEs) in peripheral regions are limited both by innate resource limitations and by location factors such as excessive distance from key markets and higher cost bases for new technology. However, the emergence of the knowledge economy may enable leveraging of knowledge to address such innate limitations. The aim of this study is to twofold. First, the study explores how SMEs in peripheral areas, i.e. challenging regions, seek to implement innovation from a path perspective by examining the contributions from antecedent and mediator variables or constructs, including knowledge-based factors identified in the literature, using a cross-sectional survey of SMEs at firm level. Second, to further examine how these path model constructs and relationships contribute in a causal manner to innovation implementation at an activity level of analysis based on knowledge-based view and dynamic capability theory, using a case study analysis. Design/methodology/approach - A sequential mixed method approach is used. In relation to the first aim a hypothetical path model is tested using structured equation modelling techniques based on a cross-sectional survey of SMEs in peripheral regions (n=604). For the second aim, to further examine how the path model constructs and relationships contribute to innovation implementation in a causal manner at an activity level of analysis, an explanatory case-based approach is used based on dynamic capability theory. Findings - The findings show that at a firm level knowledge factors influence innovation implementation as mediating factors through knowledge acquisition and assimilation which is consistent with potential absorptive capacity, and knowledge sharing linkages. Antecedent factors of lifecycle, leadership, culture and historical propensity to innovation were found to interact with the mediating variables of knowledge acquisition and assimilation, TQM/business improvement and knowledge sharing linkages (external), to produce a range of innovation outputs, including knowledge transformation and sales of new products and services from innovation activities. Based on the case study findings the underlying knowledge-based dynamic capabilities which contribute to the relationships within the path model were identified and further research agendas established. Originality/value - There is a relative paucity of studies on innovation implementation within SMEs in peripheral regions using a knowledge-based perspective at firm level, as opposed to regional level (e.g. regional innovation studies). In this context unique resource limitations and the contribution of knowledge-based factors need to be addressed. This study seeks to compliment regional level studies by making a contribution at both a cross-sectional SME or firm level and at an activity level of analysis in this area and to identify areas for further research.
LanguageEnglish
Pages66-90
JournalInternational Journal of Entrepreneurial Behaviour & Research
Volume20
Issue number1
DOIs
Publication statusPublished - 28 Feb 2014

Fingerprint

Medium-sized enterprises
Innovation implementation
Peripheral regions
Path model
Factors
Knowledge-based
Innovation
Levels of analysis
Dynamic capabilities
Knowledge sharing
Resources
Knowledge acquisition
Mixed methods
Knowledge transformation
Innovation studies
Knowledge-based view
Linkage
Influence factors
Propensity
External linkages

Cite this

@article{1a9d8ef9c7704bf997fa664ceccda39f,
title = "Determinants for innovation implementation at SME and inter SME levels within peripheral regions",
abstract = "Purpose - Innovation efforts of small- or medium-sized enterprises (SMEs) in peripheral regions are limited both by innate resource limitations and by location factors such as excessive distance from key markets and higher cost bases for new technology. However, the emergence of the knowledge economy may enable leveraging of knowledge to address such innate limitations. The aim of this study is to twofold. First, the study explores how SMEs in peripheral areas, i.e. challenging regions, seek to implement innovation from a path perspective by examining the contributions from antecedent and mediator variables or constructs, including knowledge-based factors identified in the literature, using a cross-sectional survey of SMEs at firm level. Second, to further examine how these path model constructs and relationships contribute in a causal manner to innovation implementation at an activity level of analysis based on knowledge-based view and dynamic capability theory, using a case study analysis. Design/methodology/approach - A sequential mixed method approach is used. In relation to the first aim a hypothetical path model is tested using structured equation modelling techniques based on a cross-sectional survey of SMEs in peripheral regions (n=604). For the second aim, to further examine how the path model constructs and relationships contribute to innovation implementation in a causal manner at an activity level of analysis, an explanatory case-based approach is used based on dynamic capability theory. Findings - The findings show that at a firm level knowledge factors influence innovation implementation as mediating factors through knowledge acquisition and assimilation which is consistent with potential absorptive capacity, and knowledge sharing linkages. Antecedent factors of lifecycle, leadership, culture and historical propensity to innovation were found to interact with the mediating variables of knowledge acquisition and assimilation, TQM/business improvement and knowledge sharing linkages (external), to produce a range of innovation outputs, including knowledge transformation and sales of new products and services from innovation activities. Based on the case study findings the underlying knowledge-based dynamic capabilities which contribute to the relationships within the path model were identified and further research agendas established. Originality/value - There is a relative paucity of studies on innovation implementation within SMEs in peripheral regions using a knowledge-based perspective at firm level, as opposed to regional level (e.g. regional innovation studies). In this context unique resource limitations and the contribution of knowledge-based factors need to be addressed. This study seeks to compliment regional level studies by making a contribution at both a cross-sectional SME or firm level and at an activity level of analysis in this area and to identify areas for further research.",
author = "Rodney McAdam",
note = "Reference text: Ambrosini, V., Bowman, C. and Collier, N. (2009), “Dynamic capabilities: an exploration of how firms renew their resource base”, British Journal of Management, Vol. 20 No. 5, pp. 9-24. Anderson, A.R., Jack, S. and McAuley, A. (2001), “Periphery? What periphery? Marketing to a state of mind”, Irish Marketing Review, Vol. 14 No. 1, pp. 26-34. Atkinson, R. and Kintrea, K. (2001), “Disentangling area effects: evidence from deprived and non-deprived neighbourhoods”, Urban Studies, Vol. 38 No. 12, pp. 2277-2298. Barclay, I. and Porter, K. (2005), “Facilitating innovation across SME networks”, International Journal of Entrepreneurship and Innovation Management, Vol. 5 No. 1, pp. 20-35. Bentler, P.M. (1990), “Comparative fit indices in structural models”, Psychological Bulletin, Vol. 107 No. 2, pp. 238-246. Bessant, J. and Caffyn, S. (1997), “High-investment innovation through continuous improvement”, International Journal of Technology Management, Vol. 14 No. 1, pp. 14-22. Bessant, J. and Tidd, J. (2011), Innovation and Entrepreneurship, Wiley, London. Bhaskaran, S. (2006), “Incremental innovation and business performance: small and medium-size food enterprises in a concentrated industry environment”, Journal of Small Business Management, Vol. 44 No. 1, pp. 64-80. Bierly, E. and Daly, P. (2007), “Alternative knowledge strategies, competitive environment and organisational performance in small manufacturing firms”, Entrepreneurship Theory and Practice, Vol. 31 No. 4, pp. 493-516. Bollen, K.A. (1989), Structural Equations with Latent Variables, JohnWiley & Sons, New York, NY. Burgess, T., Shaw, N. and Mattos, C. (2005), “Organisational self-assessment and the adoption of managerial innovations”, International Journal of Productivity and Performance Measurement, Vol. 54 No. 1, pp. 98-112. Callois, J. and Aubert, F. (2007), “Towards indicators of social capital for regional development issues: the case of French rural areas”, Regional Studies, Vol. 41 No. 6, pp. 809-821. CENTRIM (2010), CENTRIM Innovation Audit, Centre for Innovation Management Research, University of Brighton, Brighton, January. Churchill, N. and Lewis, V. (1983), “The five stages of small business growth”, Harvard Business Review, pp. 30-50. Clark, D. (2010), “Innovation management in SMEs: active innovators in New Zealand”, Journal of Small Business and Entrepreneurship, Vol. 23 No. 4, pp. 601-619. Cohen,W.M. and Levinthal, D.A. (1990), “Absorptive capacity: a new perspective on learning and innovation”, Administrative Science Quarterly, Vol. 35 No. 1, pp. 128-152. Cooke, P. (1996), “The new wave of regional innovation networks. Analysis, characteristics and strategy”, Small Business Economics, Vol. 8 No. 2, pp. 159-172. Cooke, P. and Schwartz, D. (2008), “Regional knowledge economies: an EU-UK and Israel perspective”, Tijdschrift voor economische en sociale geografie, Vol. 99 No. 2, pp. 178-192. Cooke, P., Uranga, M.G. and Etxebarria, G. (1997), “Regional innovative systems: institutional and organisational dimensions”, Research Policy, Vol. 26 No. 4, pp. 475-491. Craig, J. and Dibrell, C. (2006), “The natural environment, innovation, and firm performance: a comparative study”, Family Business Review, Vol. 19 No. 4, pp. 275-275. Creswell, J.W. (2003), Research Design: Qualitative, Quantitative, and Mixed Methods Approaches, Sage, New York, NY. DETI (2012), Regional Innovation Plan, Department of Enterprise Trade and Investment, Belfast, available at: www.deti.com 85 SME and inter SME levels Dougherty, D. and Hardy, C. (1996), “Sustained product innovation in large, mature organizations: overcoming innovation-to-organization problems”, Academy of Management Journal, Vol. 39 No. 5, pp. 1120-1153. du Plessis, M. (2008), “The strategic drivers and objectives of communities of practice as vehicles for knowledge management in small and medium enterprises”, International Journal of Information Management, Vol. 28 No. 1, pp. 61-67. EFQM (2011), The Business Excellence Model, European Foundation for Quality Management, Brussels. Eisenhardt, K. (1989), “Building theories from case study research”, Academy of Management Review, Vol. 14 No. 4, pp. 532-550. EU RDF Guidelines (2010), European Regional Fund Guidelines Regional, available at: www.gov.uk/browse/business/funding-debt/european-regional-development-funding Galende, J. (2006), “Analysis of technological innovation from business economics and management”, Technovation, Vol. 26 No. 3, pp. 300-311. Gatrell, J.D. (2001), “Integrated dependence: knowledge-based industries in peripheral regions”, Economic Development Review, Vol. 17 No. 3, pp. 63-69. Goktan, A.B. and Miles, G. (2011), “Innovation speed and radicalness: are they inversely related?”, Management Decision, Vol. 49 No. 4, pp. 533-547. Hair, J.F., Black, W.C., Babin, B.J. and Anderson, R.E. (2010), Multivariate Data Analysis, Prentice Hall, Upper Saddle River, NJ. Harris, R.I.D. and Robinson, C. (2002), “Research project on DTI industrial support policies”, DTI Final Report Ref, SEC Research 01ITT No. SEC01, London. Heirman, A. and Clarysse, B. (2007), “Which tangible and intangible assets matter for innovation speed in start-ups?”, The Journal of Product Innovation Management, Vol. 24 No. 4, pp. 303-315. Helfat, C., Finkelstein, W., Mitchell, M., Peteraf, H., Singh, D., Teece, D. and Winter, S. (2007), Dynamic Capabilities: Understanding Strategic Change in Organizations, Blackwell, London. Hoang, D., Igel, B. and Laosirihongthong, T. (2010), “Total quality management (TQM), strategy and organisational characteristics: evidence from a recent WTO member”, Total Quality Management, Vol. 21 No. 9, pp. 931-951. Hoyle, R.H. and Panter, A.T. (1995), “Writing about structural equation models”, in Hoyle, R.H. (Ed.), Structural Equation Modeling. Concepts, Issues and Applications, Sage, London, pp. 158-198. Hu, L. and Bentler, P.M. (1998), “Fit indices in covariance structure modeling: sensitivity to under parameterized model misspecification”, Psychological Methods, Vol. 4, pp. 424-453. Hughes, T., O’Regan, N. and Sims, M. (2009), “The effectiveness of knowledge networks; an investigation of manufacturing SMEs”, Education and Training, Vol. 51 No. 8, pp. 665-681. Ibrahim, N., Angelidis, J. and Parsa, F. (2008), “Strategic management of family businesses: current findings and directions for future research”, International Journal of Management, Vol. 25 No. 1, pp. 95-110. Izquierdo, C. and Cill�an, J. (2005), “The impact of customer relationship marketing on the firm performance: a Spanish case”, The Journal of Services Marketing, Vol. 19 No. 4, pp. 234-244. Janz, N., Loof, H., and Peters, B. (2003), “Firm level innovation and productivity – is there a common story across countries?”, Proceedings of the Comparative Analysis of Enterprise (Micro) Data Conference (CAED), Cass Business School, London. Jayawarna, D., Jones, O. and Macpherson, A. (2011), “New business creation and regional development: enhancing resource acquisition in areas of social deprivation”, Entrepreneurship and Regional Development, Vol. 23 No. 9, pp. 735-761. 86 IJEBR 20,1 Jo¨reskog, K. and So¨rbom, D. (1981), LISRELV: Analysis of Linear Structural Relationships by the Method of Maximum Likelihood, National Educational Resources, Chicago, IL. Jo¨reskog, K.G. and So¨rbom, D. (1993), Structural Equation Modeling with the SIMPLIS Command Language, Scientific Software Inc, Chicago, IL. Klein, K. and Sorra, J. (1996), “The challenge of innovation implementation”, Academy of Management Review, Vol. 21 No. 4, pp. 1055-1080. Kotler, P. (2002), Marketing Management, Prentice Hall, New York, NY. Laforet, S. and Tann, J. (2006), “Innovative characteristics of small manufacturing firms”, Journal of Small Business and Enterprise Development, Vol. 13 No. 3, pp. 363-380. Lam, A. (2004), “Organisational innovation”, BRESEWorking Paper No 1, pp. 1-44, University of London, London. Lane, P.J., Koka, B.R. and Pathak, S. (2006), “The reification of absorptive capacity: a critical review and rejuvenation of the construct”, The Academy of Management Review, Vol. 31 No. 4, pp. 833-863. Malecki, E.J. (2002), “Hard and soft networks for urban competitiveness”, Urban Studies, Vol. 39 No. 5, pp. 929-945. Miles, M. and Huberman, A. (1994), Qualitative Data Analysis, Beverly Hills, CA. Nash, R. and Martin, A. (2003), “Tourism in peripheral areas – the challenges for Northeast Scotland”, International Journal of Tourism Research, Vol. 5 No. 1, pp. 161-181. Oke, A., Idiagbon-Oke, M. and Walumbwa, F. (2007), “The relationship between broker’s influence, strength of ties and NPD project outcomes in innovation-driven horizontal networks”, Journal of Operations Management, Vol. 26 No. 4, pp. 571-599. Otero-Neira, C. and Lindman, M.T. (2009), “Innovation and performance in SME furniture industries”, Marketing Intelligence & Planning, Vol. 27 No. 2, pp. 216-232. Parast, M., Adams, S. and Jones, E. (2011), “Improving operational and business performance in the petroleum industry through quality management”, International Journal of Quality and Reliability Management, Vol. 28 No. 4, pp. 426-450. Perren, L. and Ram, M. (2004), “Case-study method in small business and entrepreneurial research: mapping boundaries and perspectives”, International Small Business Journal, Vol. 22 No. 1, pp. 83-100. Perunovic, Z. and Christiansen, T.B. (2005), “Exploring danish innovative manufacturing performance”, Technovation, Vol. 25 No. 9, pp. 1051-1058. Phelps, R., Adams, R. and Bessant, J. (2007), “Life cycles of growing organisations: a review with implications for knowledge and learning”, International Journal of Management Reviews, Vol. 9 No. 1, pp. 1-30. Pinho, C. (2008), “TQM performance in small medium enterprises the mediating effect of customer orientation and innovation”, International Journal of Quality and Reliability Management, Vol. 25 No. 3, pp. 256-275. Pullen, A., Weerd-Nederhof, P., Groen, A., Song, M. and Fisscher, O. (2009), “Successful patterns of internal SME characteristics leading to high overall innovation performance”, Creativity and Innovation, Vol. 18 No. 3, pp. 209-225. Radnor, H. (2001), Researching Your Professional Practice: Doing Interpretive Research, OU Press, London. Radnor, Z. and Boaden, R. (2004), “Developing an understanding of corporate anorexia”, International Journal of Operations and Production Management, Vol. 24 No. 4, pp. 424-440. Rammer, C. and Schmiele, A. (2009), “Drivers and effects of internationalizing innovation by SMEs”, IUP Journal of Knowledge Management, Vol. 7 No. 2, pp. 18-61. 87 SME and inter SME levels Ramos-Rodrı´guez, A., Medina-Garrido, J., Lorenzo-G�omez, J. and Ruiz-Navarro, J. (2010), “What you know or who you know? The role of intellectual and social capital in opportunity recognition”, International Small Business Journal, Vol. 28 No. 6, pp. 566-582. Remenyi, D., Williams, B., Money, A. and Swartz, E. (1999), Research in Business and Management, Sage, London. Rese, A. and Baier, D. (2011), “Success factors for innovation management in networks of small and medium enterprises”, R&D Management, Vol. 4 No. 2, pp. 138-151. Robson, C. (2002), Real World Research, Sage, London. Schafer, J.L. and Graham, J.W. (2002), “Missing data: our view of the state of the art”, Psychological Methods, Vol. 7 No. 2, pp. 147-177. Skuras, D., Tsegenidi, K. and Tsekouras, K. (2008), “Product innovation and the decision to invest in fixed capital assets: evidence from an SME survey in six European member states”, Research Policy, Vol. 37 No. 10, pp. 1778-1789. Steiger, J.H. (1990), “Structural model evaluation and modification: an interval estimation approach”, Multivariate Behavioural Research, Vol. 25 No. 2, pp. 173-180. Tanaka, Y. (1987), “A proposal for a product innovation method through fusion strategy in the intelligent computer aided management age”, Technovation, Vol. 6 No. 1, pp. 3-19. Teece, D., Pisano, G. and Shuen, A. (1997), “Dynamic capabilities and strategic management”, Strategic Management Journal, Vol. 18, pp. 509-533. Tucker, L. and Lewis, C. (1973), “A reliability coefficient for maximum likelihood factor analysis”, Psychometrika, Vol. 38 No. 1, pp. 1-10. Tura, T. and Harmaakorpi, V. (2005), “Social capital in building regional innovative capability”, Regional Studies, Vol. 39 No. 8, pp. 1111-1125. Verbees, J. and Meulenberg, M. (2004), “Market orientation, innovativeness, product innovation, and performance in small firms”, Journal of Small Business Management, Vol. 42 No. 2, pp. 134-154. Vester, E. and Boshoff, C. (2006), “Influence of owner-manager-related factors on the succession process in small and medium-sized family businesses”, International Journal of Entrepreneurship and Innovation, Vol. 7 No. 1, pp. 33-48. Welter, F., Kautonen, T., Chepurenko, A., Malieva, E. and Venesaar, U. (2004), “Trust environments and enterpreneurial behavior – exploratory evidence from Estonia, Germany and Russia”, Journal of Enterprising Culture, Vol. 12 No. 4, pp. 327-349. Westlund, H. and Bolton, R. (2003), “Local social capital and entrepreneurship”, Small Business Economics, Vol. 21 No. 2, pp. 77-113. Yin, R. (2009), Case Study Research, Sage, London. Yuan, K.H. and Bentler, P.M. (1998), “Robust mean and covariance structure analysis”, British Journal of Mathematical and Statistical Psychology, Vol. 51, pp. 63-88. Zahra, S.A. and George, G. (2002), “Absorptive capacity: a review, reconceptualization, and extension”, The Academy of Management Review, Vol. 27 No. 2, pp. 185-203. Zahra, S.A., Sapienza, H.J. and Davidson, P. (2006), “Entrepreneurship and dynamic capabilties: a review, model and research agenda”, The Journal of Management Studies, Vol. 43 No. 4, pp. 917-955. Zhang, M., Macpherson, A. and Jones, O. (2006), “Conceptualising the learning process in SMEs: improving innovation through external orientation”, International Small Business Journal, Vol. 24 No. 3, pp. 299-323. 88 IJEBR 20,1 Further reading Argyris, C. (1977), “Double loop learning in organisations”, Harvard Business Review, September- October, pp. 115-125. Canner, N. and Mass, N. (2005), “Turn R&D upside down”, Research Technology Management, Vol. 48 No. 2, pp. 17-22. Dale, B. and Lascelles, D. (1997), “Total quality management adoption: revisiting the levels”, The TQM Magazine, Vol. 9 No. 6, pp. 418-428. Davenport, S. and Bibby, D. (1999), “Rethinking a national innovation system. The small country as SME”, Technology Analysis and Strategic Management, Vol. 11 No. 3, pp. 431-462. Doloreux, D. (2003), “Regional innovation systems in the periphery: the case of the Beauce in Quebec (Canada)”, International Journal of Innovation Management, Vol. 7 No. 1, pp. 67-94. Fosfuri, A. and Tribo, J. (2008), “Exploring the antecedents of potential absorptive capacity and its impact on innovation performance”, Omega, Vol. 36 No. 2, pp. 173-187. Ghobadian, A. and Gallear, D. (1997), “TQM and organisation size”, International Journal of Operations and Production Management, Vol. 17 No. 2, pp. 121-163. Gibson, C. and Burkinshaw, J. (2004), “Contextual determinants of organisational ambidexterity”, Academy of Management Journal, Vol. 47 No. 2, pp. 209-226. Jones, J. (2005), “The determinants of training in Australian manufacturing SMEs”, Education & Training, Vol. 47 No. 8, pp. 605-616. Jones, O. (2006), “Developing absorptive capacity in mature organisations: the change agents role”, Management Learning, Vol. 37 No. 3, pp. 1350-5076. Kumar, K. (2010), “Similarities and differences in the strategic orientation, innovation patterns and performance of SMEs and large companies”, The Business Review, Vol. 16 No. 2, pp. 50-57. Mosey, S., Clare, J. and Woodcock, D. (2002), “Innovation decision making in British manufacturing SMEs”, Integrated Manufacturing Systems, Vol. 13 No. 3, pp. 176-183. Moy, J. and Luk, V. (2003), “The lifecycle model as a framework for understanding barriers to SME growth in Hong Kong”, Asia Pacific Business Review, Vol. 10 No. 2, pp. 199-210. Naveh, E. and Erez, M. (2004), “Innovation and attention to detail in the quality improvement paradigm”, Management Science, Vol. 50 No. 11, pp. 1576-1586. Orlikowski, W. (2002), “Knowing in practice: enacting a collective capability in distributed organizing”, Organizational Science, Vol. 13 No. 3, pp. 249-264. Pearce, C. and Ensley, M. (2004), “A reciprocal and longitudinal investigation of the innovation process: the central role of shaded vision in product and process innovation teams (PPITs)”, Journal of Organisational Behaviour, Vol. 25, pp. 259-278. Soderquist, K., Chanaron, J. and Motwani, J. (1997), “Managing innovation in French small and medium-sized enterprises. An empirical study”, Benchmarking for Quality Management and Technology, Vol. 4 No. 4, pp. 1-8. van derWiele, T. and Brown, A. (2000), “Venturing down the TQM path for SME’s”, International Small Business Journal, Vol. 16 No. 2, pp. 50-69. Wan, D., Ong, C. and Lee, F. (2005), “Determinants of firm innovation in Singapore”, Technovation, Vol. 25 No. 3, pp. 261-268. Appendix –",
year = "2014",
month = "2",
day = "28",
doi = "10.1108/IJEBR-02-2012-0025",
language = "English",
volume = "20",
pages = "66--90",
journal = "International Journal of Entrepreneurial Behaviour and Research",
issn = "1355-2554",
number = "1",

}

TY - JOUR

T1 - Determinants for innovation implementation at SME and inter SME levels within peripheral regions

AU - McAdam, Rodney

N1 - Reference text: Ambrosini, V., Bowman, C. and Collier, N. (2009), “Dynamic capabilities: an exploration of how firms renew their resource base”, British Journal of Management, Vol. 20 No. 5, pp. 9-24. Anderson, A.R., Jack, S. and McAuley, A. (2001), “Periphery? What periphery? Marketing to a state of mind”, Irish Marketing Review, Vol. 14 No. 1, pp. 26-34. Atkinson, R. and Kintrea, K. (2001), “Disentangling area effects: evidence from deprived and non-deprived neighbourhoods”, Urban Studies, Vol. 38 No. 12, pp. 2277-2298. Barclay, I. and Porter, K. (2005), “Facilitating innovation across SME networks”, International Journal of Entrepreneurship and Innovation Management, Vol. 5 No. 1, pp. 20-35. Bentler, P.M. (1990), “Comparative fit indices in structural models”, Psychological Bulletin, Vol. 107 No. 2, pp. 238-246. Bessant, J. and Caffyn, S. (1997), “High-investment innovation through continuous improvement”, International Journal of Technology Management, Vol. 14 No. 1, pp. 14-22. Bessant, J. and Tidd, J. (2011), Innovation and Entrepreneurship, Wiley, London. Bhaskaran, S. (2006), “Incremental innovation and business performance: small and medium-size food enterprises in a concentrated industry environment”, Journal of Small Business Management, Vol. 44 No. 1, pp. 64-80. Bierly, E. and Daly, P. (2007), “Alternative knowledge strategies, competitive environment and organisational performance in small manufacturing firms”, Entrepreneurship Theory and Practice, Vol. 31 No. 4, pp. 493-516. Bollen, K.A. (1989), Structural Equations with Latent Variables, JohnWiley & Sons, New York, NY. Burgess, T., Shaw, N. and Mattos, C. (2005), “Organisational self-assessment and the adoption of managerial innovations”, International Journal of Productivity and Performance Measurement, Vol. 54 No. 1, pp. 98-112. Callois, J. and Aubert, F. (2007), “Towards indicators of social capital for regional development issues: the case of French rural areas”, Regional Studies, Vol. 41 No. 6, pp. 809-821. CENTRIM (2010), CENTRIM Innovation Audit, Centre for Innovation Management Research, University of Brighton, Brighton, January. Churchill, N. and Lewis, V. (1983), “The five stages of small business growth”, Harvard Business Review, pp. 30-50. Clark, D. (2010), “Innovation management in SMEs: active innovators in New Zealand”, Journal of Small Business and Entrepreneurship, Vol. 23 No. 4, pp. 601-619. Cohen,W.M. and Levinthal, D.A. (1990), “Absorptive capacity: a new perspective on learning and innovation”, Administrative Science Quarterly, Vol. 35 No. 1, pp. 128-152. Cooke, P. (1996), “The new wave of regional innovation networks. Analysis, characteristics and strategy”, Small Business Economics, Vol. 8 No. 2, pp. 159-172. Cooke, P. and Schwartz, D. (2008), “Regional knowledge economies: an EU-UK and Israel perspective”, Tijdschrift voor economische en sociale geografie, Vol. 99 No. 2, pp. 178-192. Cooke, P., Uranga, M.G. and Etxebarria, G. (1997), “Regional innovative systems: institutional and organisational dimensions”, Research Policy, Vol. 26 No. 4, pp. 475-491. Craig, J. and Dibrell, C. (2006), “The natural environment, innovation, and firm performance: a comparative study”, Family Business Review, Vol. 19 No. 4, pp. 275-275. Creswell, J.W. (2003), Research Design: Qualitative, Quantitative, and Mixed Methods Approaches, Sage, New York, NY. DETI (2012), Regional Innovation Plan, Department of Enterprise Trade and Investment, Belfast, available at: www.deti.com 85 SME and inter SME levels Dougherty, D. and Hardy, C. (1996), “Sustained product innovation in large, mature organizations: overcoming innovation-to-organization problems”, Academy of Management Journal, Vol. 39 No. 5, pp. 1120-1153. du Plessis, M. (2008), “The strategic drivers and objectives of communities of practice as vehicles for knowledge management in small and medium enterprises”, International Journal of Information Management, Vol. 28 No. 1, pp. 61-67. EFQM (2011), The Business Excellence Model, European Foundation for Quality Management, Brussels. Eisenhardt, K. (1989), “Building theories from case study research”, Academy of Management Review, Vol. 14 No. 4, pp. 532-550. EU RDF Guidelines (2010), European Regional Fund Guidelines Regional, available at: www.gov.uk/browse/business/funding-debt/european-regional-development-funding Galende, J. (2006), “Analysis of technological innovation from business economics and management”, Technovation, Vol. 26 No. 3, pp. 300-311. Gatrell, J.D. (2001), “Integrated dependence: knowledge-based industries in peripheral regions”, Economic Development Review, Vol. 17 No. 3, pp. 63-69. Goktan, A.B. and Miles, G. (2011), “Innovation speed and radicalness: are they inversely related?”, Management Decision, Vol. 49 No. 4, pp. 533-547. Hair, J.F., Black, W.C., Babin, B.J. and Anderson, R.E. (2010), Multivariate Data Analysis, Prentice Hall, Upper Saddle River, NJ. Harris, R.I.D. and Robinson, C. (2002), “Research project on DTI industrial support policies”, DTI Final Report Ref, SEC Research 01ITT No. SEC01, London. Heirman, A. and Clarysse, B. (2007), “Which tangible and intangible assets matter for innovation speed in start-ups?”, The Journal of Product Innovation Management, Vol. 24 No. 4, pp. 303-315. Helfat, C., Finkelstein, W., Mitchell, M., Peteraf, H., Singh, D., Teece, D. and Winter, S. (2007), Dynamic Capabilities: Understanding Strategic Change in Organizations, Blackwell, London. Hoang, D., Igel, B. and Laosirihongthong, T. (2010), “Total quality management (TQM), strategy and organisational characteristics: evidence from a recent WTO member”, Total Quality Management, Vol. 21 No. 9, pp. 931-951. Hoyle, R.H. and Panter, A.T. (1995), “Writing about structural equation models”, in Hoyle, R.H. (Ed.), Structural Equation Modeling. Concepts, Issues and Applications, Sage, London, pp. 158-198. Hu, L. and Bentler, P.M. (1998), “Fit indices in covariance structure modeling: sensitivity to under parameterized model misspecification”, Psychological Methods, Vol. 4, pp. 424-453. Hughes, T., O’Regan, N. and Sims, M. (2009), “The effectiveness of knowledge networks; an investigation of manufacturing SMEs”, Education and Training, Vol. 51 No. 8, pp. 665-681. Ibrahim, N., Angelidis, J. and Parsa, F. (2008), “Strategic management of family businesses: current findings and directions for future research”, International Journal of Management, Vol. 25 No. 1, pp. 95-110. Izquierdo, C. and Cill�an, J. (2005), “The impact of customer relationship marketing on the firm performance: a Spanish case”, The Journal of Services Marketing, Vol. 19 No. 4, pp. 234-244. Janz, N., Loof, H., and Peters, B. (2003), “Firm level innovation and productivity – is there a common story across countries?”, Proceedings of the Comparative Analysis of Enterprise (Micro) Data Conference (CAED), Cass Business School, London. Jayawarna, D., Jones, O. and Macpherson, A. (2011), “New business creation and regional development: enhancing resource acquisition in areas of social deprivation”, Entrepreneurship and Regional Development, Vol. 23 No. 9, pp. 735-761. 86 IJEBR 20,1 Jo¨reskog, K. and So¨rbom, D. (1981), LISRELV: Analysis of Linear Structural Relationships by the Method of Maximum Likelihood, National Educational Resources, Chicago, IL. Jo¨reskog, K.G. and So¨rbom, D. (1993), Structural Equation Modeling with the SIMPLIS Command Language, Scientific Software Inc, Chicago, IL. Klein, K. and Sorra, J. (1996), “The challenge of innovation implementation”, Academy of Management Review, Vol. 21 No. 4, pp. 1055-1080. Kotler, P. (2002), Marketing Management, Prentice Hall, New York, NY. Laforet, S. and Tann, J. (2006), “Innovative characteristics of small manufacturing firms”, Journal of Small Business and Enterprise Development, Vol. 13 No. 3, pp. 363-380. Lam, A. (2004), “Organisational innovation”, BRESEWorking Paper No 1, pp. 1-44, University of London, London. Lane, P.J., Koka, B.R. and Pathak, S. (2006), “The reification of absorptive capacity: a critical review and rejuvenation of the construct”, The Academy of Management Review, Vol. 31 No. 4, pp. 833-863. Malecki, E.J. (2002), “Hard and soft networks for urban competitiveness”, Urban Studies, Vol. 39 No. 5, pp. 929-945. Miles, M. and Huberman, A. (1994), Qualitative Data Analysis, Beverly Hills, CA. Nash, R. and Martin, A. (2003), “Tourism in peripheral areas – the challenges for Northeast Scotland”, International Journal of Tourism Research, Vol. 5 No. 1, pp. 161-181. Oke, A., Idiagbon-Oke, M. and Walumbwa, F. (2007), “The relationship between broker’s influence, strength of ties and NPD project outcomes in innovation-driven horizontal networks”, Journal of Operations Management, Vol. 26 No. 4, pp. 571-599. Otero-Neira, C. and Lindman, M.T. (2009), “Innovation and performance in SME furniture industries”, Marketing Intelligence & Planning, Vol. 27 No. 2, pp. 216-232. Parast, M., Adams, S. and Jones, E. (2011), “Improving operational and business performance in the petroleum industry through quality management”, International Journal of Quality and Reliability Management, Vol. 28 No. 4, pp. 426-450. Perren, L. and Ram, M. (2004), “Case-study method in small business and entrepreneurial research: mapping boundaries and perspectives”, International Small Business Journal, Vol. 22 No. 1, pp. 83-100. Perunovic, Z. and Christiansen, T.B. (2005), “Exploring danish innovative manufacturing performance”, Technovation, Vol. 25 No. 9, pp. 1051-1058. Phelps, R., Adams, R. and Bessant, J. (2007), “Life cycles of growing organisations: a review with implications for knowledge and learning”, International Journal of Management Reviews, Vol. 9 No. 1, pp. 1-30. Pinho, C. (2008), “TQM performance in small medium enterprises the mediating effect of customer orientation and innovation”, International Journal of Quality and Reliability Management, Vol. 25 No. 3, pp. 256-275. Pullen, A., Weerd-Nederhof, P., Groen, A., Song, M. and Fisscher, O. (2009), “Successful patterns of internal SME characteristics leading to high overall innovation performance”, Creativity and Innovation, Vol. 18 No. 3, pp. 209-225. Radnor, H. (2001), Researching Your Professional Practice: Doing Interpretive Research, OU Press, London. Radnor, Z. and Boaden, R. (2004), “Developing an understanding of corporate anorexia”, International Journal of Operations and Production Management, Vol. 24 No. 4, pp. 424-440. Rammer, C. and Schmiele, A. (2009), “Drivers and effects of internationalizing innovation by SMEs”, IUP Journal of Knowledge Management, Vol. 7 No. 2, pp. 18-61. 87 SME and inter SME levels Ramos-Rodrı´guez, A., Medina-Garrido, J., Lorenzo-G�omez, J. and Ruiz-Navarro, J. (2010), “What you know or who you know? The role of intellectual and social capital in opportunity recognition”, International Small Business Journal, Vol. 28 No. 6, pp. 566-582. Remenyi, D., Williams, B., Money, A. and Swartz, E. (1999), Research in Business and Management, Sage, London. Rese, A. and Baier, D. (2011), “Success factors for innovation management in networks of small and medium enterprises”, R&D Management, Vol. 4 No. 2, pp. 138-151. Robson, C. (2002), Real World Research, Sage, London. Schafer, J.L. and Graham, J.W. (2002), “Missing data: our view of the state of the art”, Psychological Methods, Vol. 7 No. 2, pp. 147-177. Skuras, D., Tsegenidi, K. and Tsekouras, K. (2008), “Product innovation and the decision to invest in fixed capital assets: evidence from an SME survey in six European member states”, Research Policy, Vol. 37 No. 10, pp. 1778-1789. Steiger, J.H. (1990), “Structural model evaluation and modification: an interval estimation approach”, Multivariate Behavioural Research, Vol. 25 No. 2, pp. 173-180. Tanaka, Y. (1987), “A proposal for a product innovation method through fusion strategy in the intelligent computer aided management age”, Technovation, Vol. 6 No. 1, pp. 3-19. Teece, D., Pisano, G. and Shuen, A. (1997), “Dynamic capabilities and strategic management”, Strategic Management Journal, Vol. 18, pp. 509-533. Tucker, L. and Lewis, C. (1973), “A reliability coefficient for maximum likelihood factor analysis”, Psychometrika, Vol. 38 No. 1, pp. 1-10. Tura, T. and Harmaakorpi, V. (2005), “Social capital in building regional innovative capability”, Regional Studies, Vol. 39 No. 8, pp. 1111-1125. Verbees, J. and Meulenberg, M. (2004), “Market orientation, innovativeness, product innovation, and performance in small firms”, Journal of Small Business Management, Vol. 42 No. 2, pp. 134-154. Vester, E. and Boshoff, C. (2006), “Influence of owner-manager-related factors on the succession process in small and medium-sized family businesses”, International Journal of Entrepreneurship and Innovation, Vol. 7 No. 1, pp. 33-48. Welter, F., Kautonen, T., Chepurenko, A., Malieva, E. and Venesaar, U. (2004), “Trust environments and enterpreneurial behavior – exploratory evidence from Estonia, Germany and Russia”, Journal of Enterprising Culture, Vol. 12 No. 4, pp. 327-349. Westlund, H. and Bolton, R. (2003), “Local social capital and entrepreneurship”, Small Business Economics, Vol. 21 No. 2, pp. 77-113. Yin, R. (2009), Case Study Research, Sage, London. Yuan, K.H. and Bentler, P.M. (1998), “Robust mean and covariance structure analysis”, British Journal of Mathematical and Statistical Psychology, Vol. 51, pp. 63-88. Zahra, S.A. and George, G. (2002), “Absorptive capacity: a review, reconceptualization, and extension”, The Academy of Management Review, Vol. 27 No. 2, pp. 185-203. Zahra, S.A., Sapienza, H.J. and Davidson, P. (2006), “Entrepreneurship and dynamic capabilties: a review, model and research agenda”, The Journal of Management Studies, Vol. 43 No. 4, pp. 917-955. Zhang, M., Macpherson, A. and Jones, O. (2006), “Conceptualising the learning process in SMEs: improving innovation through external orientation”, International Small Business Journal, Vol. 24 No. 3, pp. 299-323. 88 IJEBR 20,1 Further reading Argyris, C. (1977), “Double loop learning in organisations”, Harvard Business Review, September- October, pp. 115-125. Canner, N. and Mass, N. (2005), “Turn R&D upside down”, Research Technology Management, Vol. 48 No. 2, pp. 17-22. Dale, B. and Lascelles, D. (1997), “Total quality management adoption: revisiting the levels”, The TQM Magazine, Vol. 9 No. 6, pp. 418-428. Davenport, S. and Bibby, D. (1999), “Rethinking a national innovation system. The small country as SME”, Technology Analysis and Strategic Management, Vol. 11 No. 3, pp. 431-462. Doloreux, D. (2003), “Regional innovation systems in the periphery: the case of the Beauce in Quebec (Canada)”, International Journal of Innovation Management, Vol. 7 No. 1, pp. 67-94. Fosfuri, A. and Tribo, J. (2008), “Exploring the antecedents of potential absorptive capacity and its impact on innovation performance”, Omega, Vol. 36 No. 2, pp. 173-187. Ghobadian, A. and Gallear, D. (1997), “TQM and organisation size”, International Journal of Operations and Production Management, Vol. 17 No. 2, pp. 121-163. Gibson, C. and Burkinshaw, J. (2004), “Contextual determinants of organisational ambidexterity”, Academy of Management Journal, Vol. 47 No. 2, pp. 209-226. Jones, J. (2005), “The determinants of training in Australian manufacturing SMEs”, Education & Training, Vol. 47 No. 8, pp. 605-616. Jones, O. (2006), “Developing absorptive capacity in mature organisations: the change agents role”, Management Learning, Vol. 37 No. 3, pp. 1350-5076. Kumar, K. (2010), “Similarities and differences in the strategic orientation, innovation patterns and performance of SMEs and large companies”, The Business Review, Vol. 16 No. 2, pp. 50-57. Mosey, S., Clare, J. and Woodcock, D. (2002), “Innovation decision making in British manufacturing SMEs”, Integrated Manufacturing Systems, Vol. 13 No. 3, pp. 176-183. Moy, J. and Luk, V. (2003), “The lifecycle model as a framework for understanding barriers to SME growth in Hong Kong”, Asia Pacific Business Review, Vol. 10 No. 2, pp. 199-210. Naveh, E. and Erez, M. (2004), “Innovation and attention to detail in the quality improvement paradigm”, Management Science, Vol. 50 No. 11, pp. 1576-1586. Orlikowski, W. (2002), “Knowing in practice: enacting a collective capability in distributed organizing”, Organizational Science, Vol. 13 No. 3, pp. 249-264. Pearce, C. and Ensley, M. (2004), “A reciprocal and longitudinal investigation of the innovation process: the central role of shaded vision in product and process innovation teams (PPITs)”, Journal of Organisational Behaviour, Vol. 25, pp. 259-278. Soderquist, K., Chanaron, J. and Motwani, J. (1997), “Managing innovation in French small and medium-sized enterprises. An empirical study”, Benchmarking for Quality Management and Technology, Vol. 4 No. 4, pp. 1-8. van derWiele, T. and Brown, A. (2000), “Venturing down the TQM path for SME’s”, International Small Business Journal, Vol. 16 No. 2, pp. 50-69. Wan, D., Ong, C. and Lee, F. (2005), “Determinants of firm innovation in Singapore”, Technovation, Vol. 25 No. 3, pp. 261-268. Appendix –

PY - 2014/2/28

Y1 - 2014/2/28

N2 - Purpose - Innovation efforts of small- or medium-sized enterprises (SMEs) in peripheral regions are limited both by innate resource limitations and by location factors such as excessive distance from key markets and higher cost bases for new technology. However, the emergence of the knowledge economy may enable leveraging of knowledge to address such innate limitations. The aim of this study is to twofold. First, the study explores how SMEs in peripheral areas, i.e. challenging regions, seek to implement innovation from a path perspective by examining the contributions from antecedent and mediator variables or constructs, including knowledge-based factors identified in the literature, using a cross-sectional survey of SMEs at firm level. Second, to further examine how these path model constructs and relationships contribute in a causal manner to innovation implementation at an activity level of analysis based on knowledge-based view and dynamic capability theory, using a case study analysis. Design/methodology/approach - A sequential mixed method approach is used. In relation to the first aim a hypothetical path model is tested using structured equation modelling techniques based on a cross-sectional survey of SMEs in peripheral regions (n=604). For the second aim, to further examine how the path model constructs and relationships contribute to innovation implementation in a causal manner at an activity level of analysis, an explanatory case-based approach is used based on dynamic capability theory. Findings - The findings show that at a firm level knowledge factors influence innovation implementation as mediating factors through knowledge acquisition and assimilation which is consistent with potential absorptive capacity, and knowledge sharing linkages. Antecedent factors of lifecycle, leadership, culture and historical propensity to innovation were found to interact with the mediating variables of knowledge acquisition and assimilation, TQM/business improvement and knowledge sharing linkages (external), to produce a range of innovation outputs, including knowledge transformation and sales of new products and services from innovation activities. Based on the case study findings the underlying knowledge-based dynamic capabilities which contribute to the relationships within the path model were identified and further research agendas established. Originality/value - There is a relative paucity of studies on innovation implementation within SMEs in peripheral regions using a knowledge-based perspective at firm level, as opposed to regional level (e.g. regional innovation studies). In this context unique resource limitations and the contribution of knowledge-based factors need to be addressed. This study seeks to compliment regional level studies by making a contribution at both a cross-sectional SME or firm level and at an activity level of analysis in this area and to identify areas for further research.

AB - Purpose - Innovation efforts of small- or medium-sized enterprises (SMEs) in peripheral regions are limited both by innate resource limitations and by location factors such as excessive distance from key markets and higher cost bases for new technology. However, the emergence of the knowledge economy may enable leveraging of knowledge to address such innate limitations. The aim of this study is to twofold. First, the study explores how SMEs in peripheral areas, i.e. challenging regions, seek to implement innovation from a path perspective by examining the contributions from antecedent and mediator variables or constructs, including knowledge-based factors identified in the literature, using a cross-sectional survey of SMEs at firm level. Second, to further examine how these path model constructs and relationships contribute in a causal manner to innovation implementation at an activity level of analysis based on knowledge-based view and dynamic capability theory, using a case study analysis. Design/methodology/approach - A sequential mixed method approach is used. In relation to the first aim a hypothetical path model is tested using structured equation modelling techniques based on a cross-sectional survey of SMEs in peripheral regions (n=604). For the second aim, to further examine how the path model constructs and relationships contribute to innovation implementation in a causal manner at an activity level of analysis, an explanatory case-based approach is used based on dynamic capability theory. Findings - The findings show that at a firm level knowledge factors influence innovation implementation as mediating factors through knowledge acquisition and assimilation which is consistent with potential absorptive capacity, and knowledge sharing linkages. Antecedent factors of lifecycle, leadership, culture and historical propensity to innovation were found to interact with the mediating variables of knowledge acquisition and assimilation, TQM/business improvement and knowledge sharing linkages (external), to produce a range of innovation outputs, including knowledge transformation and sales of new products and services from innovation activities. Based on the case study findings the underlying knowledge-based dynamic capabilities which contribute to the relationships within the path model were identified and further research agendas established. Originality/value - There is a relative paucity of studies on innovation implementation within SMEs in peripheral regions using a knowledge-based perspective at firm level, as opposed to regional level (e.g. regional innovation studies). In this context unique resource limitations and the contribution of knowledge-based factors need to be addressed. This study seeks to compliment regional level studies by making a contribution at both a cross-sectional SME or firm level and at an activity level of analysis in this area and to identify areas for further research.

U2 - 10.1108/IJEBR-02-2012-0025

DO - 10.1108/IJEBR-02-2012-0025

M3 - Article

VL - 20

SP - 66

EP - 90

JO - International Journal of Entrepreneurial Behaviour and Research

T2 - International Journal of Entrepreneurial Behaviour and Research

JF - International Journal of Entrepreneurial Behaviour and Research

SN - 1355-2554

IS - 1

ER -