Indirect effect of extra-industry network and innovativeness on performance through proactiveness

Abstract

Purpose The current study aims to advance the research on the extra-industry network, innovativeness and performance of small and medium enterprises (SMEs) by examining the mediation role of proactiveness. The study also aims to examine the mediating role innovativeness between extra-industry network and performance. Design/methodology/approach This study used the proportionate stratified random sampling method to select the study sample and the questionnaire survey approach to 580 SMEs. A total of 150 completed questionnaires were returned. Partial least squares structural equation modeling was administered to analyze data via Smart PLS 3.0 software. Findings The results reflect that proactiveness is mediated by the relationship between the extra-industry network and the performance of Iranian SMEs. In addition, the results illustrated that proactiveness is mediated by the relationship between innovativeness and the performance. The findings also address the limitation of previous studies on Iranian SMEs through the independent examination of the mediating role of innovativeness between firm extra-industry network and performance. Originality/value This article is one of few attempts that have addressed the significance of proactiveness as the key mechanism to transform the advantages of extra-industry network and innovativeness relationships to enhance performance.

The Mediating Role of Entrepreneurial Orientation Between Relational Capital and Firm Performance

“…Firms should therefore prioritize knowledge in relation to customers and suppliers' needs and demands to improve their performance and profits by practicing intense interplay, personal visits, frequent communication, and insights into the working of foreign markets (Jalali et al, 2022). Forsgren (2002, p.264) suggested that "a special aspects of learning from other organizations is learning through the existing business relationships.…”

“…Proactiveness is defined as acting opportunistically to shape the environment by influencing trends, creating demand, and becoming a first mover in a competitive market (Jalali & Jaafar, 2019;Lumpkin & Dess, 1996). Proactiveness is necessary for competitive advantage (Brendle, 2001) where it provides opportunities-based knowledge pertaining competitors and initiatives (Zahra & Covin, 1995) and it return, enables the ability of controlling the market network distribution and establishing brand recognition (Jalali et al, 2022;Wiklund & Shepherd, 2005).…”

“…Fundamentally affecting the economic growth, both globally and domestically, customer-based Small and medium enterprises (SMEs) are promised a smooth path towards the global market (Jalali & Jaafar, 2019). Jalali, Abhari, and Jaafar (2022) argued that SMEs focusing on meeting customer demands can successfully enter the universal market. Rashidirad and Salimian (2020) asserted that SMEs account for an estimated two-third of industrial employment in developed countries such as USA and UK.…”

“…Traditional economy focused on the basic resources necessary for the firm such as land, labour and other classical assets (Jalali et al, 2022;Sullivan, 2000). Jalali and Jaafar (2019) employed the resource-based view (RBV) in order to seek a list of resources (tangible and intangible) that motivates the SMEs competitiveness level.…”

“…There are numerous studies in entrepreneurship which show the benefit of social relationship in order to sustain new business (Safari & Saleh, 2020). Moreover, Jalali et al (2022) examine how an impressive relationship can be sustained over the long term. Despite the previous studies that have been done regarding networks, Cohen and Kaimenakis (2007) argue that few studies have explored intangible resources such as relational capital in SMEs.…”