A Review of the Literature of the Relationship between Innovation and Internationalization of SMEs and Future Prospects

Abstract

Innovation and internationalization are important strategic choices for SMEs. Previous studies have explored the relationship between them based on different theories. Innovation and internationalization have different mutual relationships in different regions and industries. In developed countries, innovation and internationalization are the "old topics" in academic research field. Whether internationalization has an impact on innovation remains questionable. In emerging markets, the relationship between innovation and internationalization presents different characteristics. The shortage of resources makes it hard to adopt both innovation and internationalization strategies. Combing the existing literature, this paper classifies the theoretical basis and research level of the literature, systematically analyzes the interaction of innovation and internationalization, and summarizes the existing research framework. Based on this, the future research directions in this field are pointed out.

Budget Participation Capacity Configuration (BPCC), Budgeting Participation Requirement and Product Innovation Performance

“…This research also confirms that a module composed of procedural justice, self-efficacy, and trust in superiors can improve product innovation performance, so this module essentially forms a product innovation capability. The results are consistent with the views that the interdependence of management control elements can bring product innovation capability [15], and the product innovation capabilities can improve organizational performance [16,67].…”

“…In the relation between an external environment and an organizational strategy, since the customer's preference is changeable and the competitor's threat is indistinct, the environment confronted by managers is constantly variable and cannot be fully controlled. In this situation, for satisfying the customer's needs and manufacturing unique products, a firm should actively develop and innovate to create competitive advantages on important product attributes [15,16,[58][59][60]. Namely, when facing a high perceived budget participation requirement to cope with changeable environment, a firm will adopt an innovation strategy.…”

“…Budget is a necessary resource for product innovation and participating in budget allocation is a necessary way for department managers to obtain appropriate budgets [2,4]. Prior studies have extensively discussed the relationship between budget and product innovation [15,16], but there is a lack of research on budget participation requirement and product innovation performance. In the research on the effectiveness of budget participation, it is considered that procedural justice, self-efficacy, and trust in superiors are significant organizational control elements, which have the ability to improve organizational performance [1,[17][18][19][20].…”