Firm resilience as a moderating force for SMEs’ innovation performance: Evidence from an emerging economy perspective

Abstract

This study delves into the relationship between organizational resilience and organizational ambidexterity in the context of small and medium-sized enterprises (SMEs) facing exogenous shocks in emerging economies. Specifically, it investigates how firm resilience influences the connection between innovation capabilities and innovation performance. A cross-sectional database comprising 170 SMEs in Bosnia and Herzegovina forms the basis of this research. Utilizing multivariate linear regression analysis, the study tests its research hypotheses. The study reveals that exploitative innovation capabilities positively contribute to innovation performance, and firm resilience moderates this relationship. However, the analysis does not support the significance of explorative innovation capabilities in impacting innovation performance. The findings underscore the pivotal role of organizational resilience for SMEs in navigating external shocks within small emerging economies. Cultivating and enhancing resilience becomes imperative for coping with such challenges effectively. This paper contributes by linking resilience theories with existing literature on organizational ambidexterity. Additionally, it sheds light on the differing impacts of exploitative and explorative innovation capabilities on determining innovation performance.