Innovation-performance relationship: the moderating role of market dynamism

The aims to examine how dimensions of innovation uniquely influence firm performance in the dynamic market environment. The study was conducted with a dataset from 177 Micro and Small Enterprises (MSEs) in Ghana. A Hierarchical Multiple Regression (HMR) technique was used to explore the relationships. Among the three dimensions of Innovation, the study found that, product and technological innovations individually related to performance positively. However, customer service innovation positively and significantly affect performance of MSEs. Focusing on the interaction, the study found that market dynamism positively and significantly moderates the relationship between technological innovation and performance. Moreover, the interaction between customer service innovation and market dynamism was negative and significant. However, the study did not find support for the moderating effect of market dynamism on product innovation-performance nexus. The implication is that, in the context of market dynamism, technological innovation is required by managers of MSEs to attain superior performance.