The influences of innovation on business performance: the case study of small and medium-sized enterprises in Vietnam
DOI:
https://doi.org/10.51599/is.2024.08.04.01Keywords:
business performance, innovation, multiple regression model, SMEs, Vietnam.Abstract
Purpose. Innovation plays an important role in businesses and is one of the factors that drive their business performance. This study investigates the impact of four dimensions of innovation – product innovation, process innovation, marketing innovation, and organisational innovation – on the business performance of small and medium-sized enterprises (SMEs) in Vietnam through regression model analysis with a survey sample of 488 enterprises.
Results. The study shows that all four innovation factors – organisational innovation, marketing innovation, process innovation and product innovation – have a statistically significant positive impact on SMEs business performance. The results show that firms that are more actively engaged in innovation demonstrate better overall performance. Among the factors, organisational innovation has the strongest impact on business performance, followed by marketing innovation, process innovation, and product innovation. This finding highlights the essential role of innovation in driving success and competitiveness for SMEs in Thanh Hoa Province, Vietnam.
Scientific novelty. The novelty of this study is related to the investigation of a new model. While previous studies only considered the impact of one or two types of innovation on business performance, this study simultaneously analysed the impact of all four types of innovation on business performance, thence providing a more comprehensive view of the role of each type of innovation for businesses, thereby providing a more specific basis for proposing solutions for each aspect of innovation in businesses.
Practical value. Based on the research results, the author has proposed several recommendations for SMEs in Thanh Hoa, Vietnam to further foster innovation, thus enhancing their business performance in the context of the digital economy. The findings underscore that a proactive approach to innovation – particularly in organisational, marketing, and process domains – will provide businesses with the tools they need to thrive and maintain their competitive edge in the long term.
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