The effects of social ties on innovation behavior and new product performance in emerging economies: evidence from Turkey

Abstract

Purpose The purpose of this paper is to offer a theoretical and empirical understanding of how social ties affect innovation behavior and new product performance in Turkey, which is an emerging economy where high levels of economic and political uncertainties exist.The authors examine whether innovation behavior binds the political and business ties of the firm to new product performance. They also examine if these effects are contingent on variations in the institutional environment and market environment. Design/methodology/approach Structural equation modeling and mediation analyses were used on a sample of 344 small- and medium-sized enterprises in Istanbul. Findings Business ties are positively related to exploratory innovation behavior and political ties hamper such behavior. The authors also show that government support hinders firms’ disruptive innovation while encouraging incremental innovation behavior. The authors further demonstrate that the positive and indirect relation of business ties to new product performance through exploratory and exploitative innovation is largely insensitive to changes in market and institutional environments. Political ties are negatively (positively) and indirectly related to new product performance through exploratory (exploitative) innovation. Practical implications Managers should choose the form of their personal interactions (political and/or business) based on the type of innovation that is being pursued. Additionally, managers should consider both the institutional environment and the market environment as important contingencies in their decision of whether to invest resources in developing social ties to build innovation behavior. Originality/value The authors offer a deeper perspective of how social ties in emerging economies affect new product performance by considering exploratory and exploitative innovation behavior as mediating mechanisms. These mediating effects are conditional on institutional and market environments.

Customer prioritization, product complexity and business ties: implications for job stress and customer service performance

“…Second, personal coping resources that are external to the firm like business ties are very important to SMEs operating in emerging economies, as these organizations have very limited access to internal resources (i.e. equity capital and credit) compared to larger firms (Yeniaras et al, 2020a(Yeniaras et al, , 2020c. In addition, according to a 2018 review of the European Commission [2], there are 9.960 million employees working at a total of 2.67 million SMEs with an average number of an employee of only 4.…”

“…As a result, we believe that such mechanisms are largely ineffective in assisting managers in coping with the tension they face. In this vein, research shows that SMEs in emerging economies with underdeveloped economic institutions (Kaya and Kaya, 2020) depend heavily on external funding to operate their businesses (Yeniaras et al, 2020a(Yeniaras et al, , 2020c. Business relations, which have become the economic lifeblood of business conduct in emerging markets (Peng and Luo, 2000), can provide SME managers with constant access to external cognitive and emotional resources (Yeniaras et al, 2020a).…”

“…In this vein, research shows that SMEs in emerging economies with underdeveloped economic institutions (Kaya and Kaya, 2020) depend heavily on external funding to operate their businesses (Yeniaras et al, 2020a(Yeniaras et al, , 2020c. Business relations, which have become the economic lifeblood of business conduct in emerging markets (Peng and Luo, 2000), can provide SME managers with constant access to external cognitive and emotional resources (Yeniaras et al, 2020a). In line with the JD-R framework, we selected two internal (organization-related) job demands: customer prioritization and product complexity and variety.…”

“…customer prioritization) and/or have chosen to sell a more technically advanced range of goods and services based on product complexity and variety to maximize perceived brand quality and customer loyalty and satisfaction. However, due to technical, political and economic uncertainties, as well as restricted access to capital equity and/or credit, such strategies may be difficult, especially for SMEs operating in emerging economies (Yeniaras et al, 2020a(Yeniaras et al, , 2020b(Yeniaras et al, , 2020c. Furthermore, the lack of structured procedures, leadership, resources and processes that are typical in SMEs hinder the implementation and acceptance of such approaches.…”

The bidirectional complementarity between market orientation and launch proficiency affecting new product performance

“…The empirical results indicate that formalization is positively related to new product performance while decentralization has an inverse U-shaped curvilinear effect on new product performance. Furthermore, the regression findings also indicate that market-oriented strategy negatively moderates the relationship between formalization and new product performance, while technology-oriented strategy positively moderates the curvilinear relationship between decentralization and new product performance Yeniaras et al (2020) The authors examine whether innovation behavior binds the political and business ties of the firm to new product performance. They also examine if these effects are contingent on variations in the institutional environment and market environment Business ties are positively related to exploratory innovation behavior and political ties hamper such behavior.…”