Strategic Innovation and Competitive Advantage of Manufacturing SMEs: The Mediating Role of Human Capital
Abstract
Purpose: The purpose of this paper is to examine the mediating effect of human capital on the relation between the strategic innovation and competitive advantage of SMEs in Yemen.
Methodology/Approach: The PLS-SEM analysis is performed to test the hypotheses by using data collected from 238 SMEs in Yemen. The results support the hypotheses.
Findings: The results of the PLS-SEM analysis are as follows: strategic innovation had a significant effects on SMEs’ competitive advantage; also human capital had a significant effects on SMEs’ competitive advantage; human capital mediated the effect of strategic innovation on competitive advantage; and strategic innovation had a positive and significant effect on human capital.
Research Limitation/Implication: The population of the study was limited to manufacturing SMEs, so the results cannot be generalized to other types of industry such as services, whose structure and vision differ from those of manufacturing companies.
Originality/Value of paper: The paper is one of the first to highlight human capital as a mediator between strategic innovation and competitive advantage of manufacturing SMEs in Yemen and the Middle East, describing a single study applied in the context of a developing country.References
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Delery, J.E. and Roumpi, D., 2017. Strategic human resource management, human capital and competitive advantage: is the field going in circles? Human Resource Management Journal [e-journal], 27(1), pp.1-21. doi: 10.1111/1748-8583.12137.
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Dyer, J.H. and Singh, H., 1998. The relational view: Cooperative strategy and sources of inter organisational competitive advantage. Academy of management review [e-journal], 23(4), pp.660-679. doi: 10.2307/259056.
Edeh, J.N., Obodoechi, D.N. and Ramos-Hidalgo, E., 2020. Effects of innovation strategies on export performance: New empirical evidence from developing market firms. Technological Forecasting and Social Change [e-journal], 158, p.120167. doi: 10.1016/j.techfore.2020.120167.
Eniola, A.A. and Ektebang, H., 2014. SME firms performance in Nigeria: Competitive advantage and its impact. International Journal of Research Studies in Management [e-journal], 3(2), pp.75-86. doi: 10.5861/ijrsm.2014.854.
Fowler Jr., F.J., 2013. Survey research methods. 5th Edition. SAGE publications.
Genc, E., Dayan, M. and Genc, O.F., 2019. The impact of SME internationalization on innovation: The mediating role of market and entrepreneurial orientation. Industrial Marketing Management [e-journal], 82, pp.253-264. doi: 10.1016/j.indmarman.2019.01.008.
Giachetti, C. and Lanzolla, G., 2016. Product Technology imitation over the product Diffusion cycle: Which Companies and product innovations do competitors imitate more quickly? Long Range Planning [e-journal], 49(2), pp.250-264. doi: 10.1016/j.lrp.2015.05.001.
Hair Jr., J.F., Anderson, R.E., Babin, B.J. and Black, W.C., 2010. Multivariate data analysis: A global perspective. 7th Edition. Upper Saddle River: Pearson Education.
Hair Jr., J.F., Sarstedt, M., Ringle, C.M. and Gudergan, S.P., 2017. Advanced issues in partial least squares structural equation modelling. SAGE publications.
Herrera, M.E.B., 2015. Creating competitive advantage by institutionalizing corporate social innovation. Journal of Business Research [e-journal], 68(7), pp.1468-1474. doi: 10.1016/j.jbusres.2015.01.036.
Hinterhuber, A. and Liozu, S.M., 2014. Is innovation in pricing your next source of competitive advantage? Business Horizons [e-journal], 57(3), pp.413-423. doi: 10.1016/j.bushor.2014.01.002.
Hitt, M.A., Bierman, L., Shimizu, K. and Kochhar, R., 2001. Direct and moderating effects of human capital on strategy and performance in professional service firms: A resource-based perspective. Academy of Management journal [e-journal], 44(1), pp.13-28. doi: 10.5465/3069334.
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Hsu, B.X. and Chen, Y.M., 2019. Industrial policy, social capital, human capital, and firm-level competitive advantage. International Entrepreneurship and Management Journal [e-journal], 15(3), pp.883-903. doi: 10.1007/s11365-019-00584-7.
Huo, B., Ye, Y., Zhao, X. and Shou, Y., 2016. The impact of human capital on supply chain integration and competitive performance. International Journal of Production Economics [e-journal], 178, pp.132-143. doi: 10.1016/j.ijpe.2016.05.009.
Jin, Y., Hopkins, M.M. and Wittmer, J.L., 2010. Linking human capital to competitive advantages: Flexibility in a manufacturing firm's supply chain. Human Resource Management [e-journal], 49(5), pp.939-963. doi: 10.1002/hrm.20385.
Johnson, M.W. and Lafley, A.G., 2010. Seizing the white space: Business model innovation for growth and renewal. Harvard Business Press.
Kahn, K.B., 2018. Understanding innovation. Business Horizons [e-journal], 61(3), pp.453-460. doi: 10.1016/j.bushor.2018.01.011.
Kamukama, N. and Sulait, T., 2017. Intellectual capital and competitive advantage in Uganda’s microfinance industry. African Journal of Economic and Management Studies [e-journal], 8(4), pp.498-514. doi: 10.1108/AJEMS-02-2017-0021.
Kianto, A., Sáenz, J. and Aramburu, N., 2017. Knowledge-based human resource management practices, intellectual capital and innovation. Journal of Business Research [e-journal], 81, pp.11-20. doi: 10.1016/j.jbusres.2017.07.018.
Kodama, M., 2018. Sustainable growth through strategic innovation: Driving congruence in capabilities. Edward Elgar Publishing.
Kotabe, M. and Kothari, T., 2016. Emerging market multinational companies’ evolutionary paths to building a competitive advantage from emerging markets to developed countries. Journal of World Business [e-journal], 51(5), pp.729-743. doi: 10.1016/j.jwb.2016.07.010.
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Lee, V.H., Foo, A.T.L., Leong, L.Y. and Ooi, K.B., 2016. Can competitive advantage be achieved through knowledge management? A case study on SMEs. Expert Systems with Applications [e-journal], 65, pp.136-151. doi: 10.1016/j.eswa.2016.08.042.
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Authors
AlQershi, N. A., Diah, M. L. B. M., Latiffi, A. B. A., & Ahmad, W. N. K. W. (2020). Strategic Innovation and Competitive Advantage of Manufacturing SMEs: The Mediating Role of Human Capital. Quality Innovation Prosperity, 24(3), 70–89. https://doi.org/10.12776/qip.v24i3.1493
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