The mediating effects of product innovation in relation between knowledge management and competitive advantage

Abstract

Purpose The purpose of this paper is to examine the mediating effect of product innovation on the relation between the knowledge management and competitive advantage. To analyze the effect of knowledge management on innovation, the effect of knowledge management on competitive advantage and the effect of innovation on competitive advantage in small and medium enterprises in food products are taken into account. Design/methodology/approach The approach used in this study was quantitative approach. The population in this study was all the small and medium entrepreneurs of typical food products of Riau and Central Java Indonesia, which consisted of 238 business units: secondary data of Industry, Trade and Cooperative Service and SME Riau and Central Java Province at 2016. The data analysis method was structural equation modeling, using three measurement models (reflection of three research variables, equivalent to the first-order factor analysis). Findings Product innovation mediated the effect of knowledge management on the competitive advantage. It indicated that the higher the knowledge management, the higher the competitive advantage would be, if mediated by higher product innovation. The test results showed that knowledge management had positive and significant effect on product innovation. The positive effect showed that the better the knowledge management by the entrepreneurs of small and medium enterprises of typical food products of Riau, the better is the product innovation and vice versa. Originality/value This paper examines the mediating effects (using Sobel test) of product innovation on the relation between knowledge management and competitive advantage (no previous research on this relation), and the study is conducted on SMEs in Indonesia, especially in Riau and Central Java provinces. Previous studies on knowledge management and other factors affecting competitive advantage are also mostly performed on smaller samples, that is in one work unit or department. Although the variables were the same, this study was conducted on different sample units.

Entrepreneurial Passion and Self-Efficacy as Factors Explaining Innovative Behavior: A Mediation Model

“…Results using Sobel's test (Sobel 1982) for a better interpretation of the mediating effect, as applied by Clarke and Rhodes (2020) and Wahyono (2019), to test the statistical significance of the indirect effects, confirmed that ESE has a significant indirect impact on IB through EP (Table 8). In other words, ESE's impact on IB is mediated by EP.…”

“…Several scholars have researched the topic of innovation in recent years. Different studies (Balsmeir et al, 2017;Kogan et al, 2017;Ramírez-Montoya 2018;Coad et al, 2016;2019) analyze its implication in large and small companies, its importance as a business tool and its implication in the academy. Scott and Bruce (1994) identify a three-layer process of IB, explaining how an individual innovates in the workplace.…”

Antecedents of Product Innovation for Vietnamese SMEs: The Roles of Transformational Leadership and Organizational Culture

“…Innovation capability is classified into many types such as product and process innovation (Tsai et al, 2001), exploitative and exploratory innovation (Than et al, 2021); innovation speed and quality (Le & Le, 2018), radical and incremental innovation (Nguyen et al, 2021), and frugal innovation capability (Le, 2021). This study focus on TL-innovation capability relationship in term of product innovation because innovation product is widely regarded as the main form of innovation capability Wahyono, 2019). Wherein, product innovation refers to organization's capability of providing differentiated or new products/services in the market to acquire customers' satisfaction Rasheed et al, 2021).…”

Antecedents and Consequences of Organizational Innovation: Study on Small and Medium Enterprises in the Consumer Goods Industry

“…Research on product innovation in manufacturing companies in Turkey was carried out by Aydin [9]. Other research in SMEs was conducted by Ko et al and Wahyono [10], [11]. Widya Hastuti et al [12] analyzed process innovation in SMEs [12].…”