International EM SME innovation through knowledge management

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This study aimed to examine the influence of knowledge management on EM SME innovation by asking the following research question: To what extent does knowledge management influence EM SME innovation? The findings of this study prove that knowledge management only partly influences EM SME innovation in a positive way, namely through the dimension of knowledge embedding. The greater a firm’s ability to embed knowledge into the organisation, the greater both process & product innovation performance. This is an interesting finding, as current literature on knowledge embedding in combination with EM SME innovation is very scarce. Knowledge sourcing and knowledge acquisition proved not to have a positive significant influence on process & innovation, this was contrary to expectations beforehand. The previous chapter discussed possible explanations for the non-significant influence of these knowledge management practices on innovation. However, more research might be needed as current literature is contradictive whether knowledge sourcing and knowledge acquisition should positively or negatively influence innovation performance. Knowledge sourcing and knowledge acquisition proved to have the opposite effect as assumed beforehand, as they negatively influence product innovation. A second research question was asked to examine the importance of EM SME internationalization on innovation performance, namely: To what extent is the relationship between knowledge management and EM SME innovation moderated by firm internationalization? Surprisingly, EM SME internationalization has a positive effect on the influence of knowledge acquisition on process and product innovation. This means that for international EM SMEs, knowledge acquisition has a significant positive influence on innovation performance, compared to domestic firms. This highlights the importance of firm internationalization in order to acquire the necessary knowledge for process & product innovation. This study concludes that knowledge management has a positive influence on EM SME innovation, if only partially. The same was found to be true for EM SME internationalization. This study contributes to the innovation literature by examining the effects of knowledge management on innovation, to the EM SME literature by examining drivers for EM SME innovation, and to the internationalization literature by examining the influence of EM SME internationalization on the relationship between knowledge management and innovation. The main limitation of this study was that it only examined data from the South African manufacturing industry, and thus no conclusion could be drawn regarding other industries and sectors. This is a good subject for future research: to examine the effects of knowledge management on EM SME innovation in other industries and different countries. More research is also needed on drivers of EM SME innovation, to increase the understanding on how to enhance innovation performance in emerging markets, to help SMEs grow and thus increase prosperity in these emerging markets.
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