Entrepreneurial Orientation and Innovation Performance of Saudi Firms: A Sequential Mediation Model of Absorptive Capacity and Innovation Capability

Abstract

This study examines the relationship between entrepreneurial orientation (EO) and innovation performance (IP) using a sequential mediation model of absorptive capacity (AC) and innovation capability (ICAP). We conduct a literature review, develop and test hypotheses using structural equation modelling (SEM) and data collected from 225 Saudi small and medium enterprises (SMEs) operating in several sectors in Saudi Arabia. The findings reveal statistically significant relationships between the EO dimensions (proactive innovativeness and risk-taking) and AC and ICAP. However, no direct relationship is found between the EO dimensions and IP. Therefore, AC mediates the relationship between the EO dimensions and ICAP. In addition, ICAP mediates the relationship between the EO dimensions and AC to IP, while AC does not mediate the relationship between the EO dimensions and IP. To the best of our knowledge, limited research has simultaneously explored the impact of EO, AC, ICAP, and IP in the Saudi context. Our study adds to the existing body of knowledge in the fields of entrepreneurship, innovation, and strategic management by providing empirical evidence specific to the Saudi context. It also displays the significance of managers turning strategic EO dimensions into innovation outcomes through AC and ICAP as a contribution to managerial practices.

Big Data Analytics, Strategic Capabilities, and Innovation Performance: Mediation Approach of Organizational Ambidexterity

“…First, its finding confirms the positive direct relationship between BDACs and IP, and it is consistent with previous studies [4,11,35,44,45,72,74]. Second, regarding the hypothesis that stated that there is a positive relationship between SIC and IP, the finding of this study is in line with previous research [6,51,63,64]. Third, this study explored the relationship between OAMB and IP, and its finding is consistent with those of previous studies [30,[77][78][79].…”

“…SIC is an essential prerequisite for unlocking superior firm, organizational, and IP [5,51,63,64]. Research affirms that firms equipped with robust SIC consistently achieve superior IP due to their ability to effectively generate and implement new strategies for novel ideas for products, services, and processes based on knowledge and insights extracted and analyzed through the deployment of IT-based capabilities.…”

“…Innovation performance (IP) refers to the outcomes of a firm's innovation efforts, including the successful launch and differentiation of new products/services, the renewal of administrative systems and business processes to align with the market environment [6,44,63,64], and the firm's ability to create value through these innovation endeavors to outperform competitors in meeting customer and market demands [29,35,40,65]. IP is essential for businesses and industries as it drives competitive advantage, enables adaptation to changing market conditions, facilitates new product/service development, improves operational efficiency, and allows organizations to stay relevant and responsive to evolving customer needs within dynamic competitive landscapes.…”