Innovation, internationalisation and the performance of microbusinesses

Abstract

This article integrates internationalisation, and specifically exporting, into a conceptualisation of how innovation production leads to productivity performance in microbusinesses employing fewer than 10 people. Innovation production is reframed for the microbusiness context by focusing on knowledge acquisition and formalisation rather than on research and development (R&D) activity. Propensity score matching analysis is used to investigate British microbusiness survey data. It finds a causal process in which innovation promotes exporting activity. This in turn leads to improved productivity. In contrast to research on larger businesses, this study finds no direct link between innovation production and productivity. These findings are robust to various checks for potential endogeneity arising from feedback into innovation from internationalisation and from self-selection of high productivity firms into exporting.

Context-specific micro-foundations and successful SME internationalisation in emerging markets: A mixed-method analysis of managerial resources and dynamic capabilities

“…However, several shortcomings and gaps have been found in extant research. To start with, international entrepreneurship scholars have advocated a focus at different levels: some on the environmental characteristics (e.g., Bruton et al, 2010;Sadeghi et al, 2019), others on business characteristics (e.g., Henley & Song, 2020), however, there has been less attention to lower levels, in particular at the individual level (Adams et al, 2009;Gavetti, 2005). The scant research suggests more exploration of micro-foundations perspectives that potentially are more fundamental and stable (Chittoor et al, 2019).…”

Mapping SME productivity research: a systematic review of empirical evidence and future research agenda

“…Other aspects examined by studies in this theme are the role of advisors, and the relationship between takeovers/firm mobility and productivity. Henley and Song (2019), for exmaple, find that using external advice, business networking, and having a formal business plan, are all associated with a significant increase in the likelihood that micro-firms will innovate. Studies focused on analysing interventions aimed at increasing SMEs' innovation capabilities also find that, while such interventions have a positive impact on goal setting, firm performance, and labour productivity, they have a detrimental effect on innovation activities (Oeij et al 2015).…”

“…First order codes Second order themes Aggregate dimensions technology investments [Torre & Solari (2011); Bartel et al (2007); Ballestar et al (2020)] R&D (15) R&D intensity [Hall et al (2009); Raymond, & St-Pierre (2004); Falk & de Lemos (2019); Griffith et al (2006); Nunes et al (2013)];R&D subsidies [Karhunen & Huovari (2015); Hottenrott & Lopes-Bento (2014)] R&D spending [Manez et al (2013); Serban (2013); Baumann & Kritikos (2016); Niebuhr (2010); Ballestar et al (2020); Parisi et al (2006); Audretsch & Belitski (2020); ] Product & process innovation (10) firm size/R&D activities [Hall et al (2009); Baumann & Kritikos (2016); Griffith et al (2006); Parisi et al (2006) ] economic cycle [Madrid-Guijarro et al (2013)];IT integration [Raymond et al (2013)]; cooperative ties [Tomlinson & Fai (2013)]; manufacturing technology/organization context [Uwizeyemungu et al (2015); Niaki & Nonino (2017)]; export activity [Henley & Song (2019)]…”

“…Process innovation (6) lean manufacturing [Dora et al (2013);Dora et al (2014)];process improvement [Gunasekaran et al (2000)]; quality improvement [Maani et al (1994)]; R&D activities [Manez et al (2013)]; technology integration [Esan et al (2013)] Product innovation (5) product development innovation [Bagchi-Sen (2001);Calderini & Cantamessa (1997)] business strategy [Su & Tang (2016)]; IT investment/capability [Bartel et al (2007); Li et al (2009)] competitive environment [Hernandez-Espallardo & Delgado-Ballester, (2009)] Collaborations (15) alliances & networking [Gunasekaran et al (1996); Hemert et al (2013); Mancinelli & Mazzanti (2009); Noke & Hughes (2010); Ruivo et al (2015); Scuotto et al (2017); Tomlinson & Fai (2013); Gare & Melin (2011); Hottenrott & Lopes-Bento (2014); Bakhtiari (2015); Henley & Song (2019)] knowledge transfers/spillover [Humphries (2005); Jones & Corral (2017); Audretsch & Belitski (2020)] research joint ventures [Barajas et al (2016)…”

Current Research Trends on Interrelationships of Eco-Innovation and Internationalisation: A Bibliometric Analysis

“…Thus, the scholars treat the internationalisation process as encompassing the opportunities for emerging foreign firms to build various relationships (Deng et al 2020). Moreover, previous investigations in the context of smaller firms disclosed various paths of growth, such as through the improvement of products, expansion of market share through innovation or the expansion of foreign market share through exports i.e., internationalisation (Henley and Song 2019).…”