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The Role of Process Innovation between Firm-Specific Capabilities and Sustainable Innovation in SMEs: Empirical Evidence from Indonesia

Afris Widya-Hasuti (), Abbas Mardani, Dalia Streimikiene (), Ali Sharifara () and Fausto Cavallaro ()
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Afris Widya-Hasuti: Politeknik ATI Makassar, South Sulawesi 90152, Indonesia
Dalia Streimikiene: Kaunas Faculty, Vilnius University, Muitines g. 8, Kaunas 44280, Lithuania
Ali Sharifara: Department of Computer Science and Engineering, University of Texas at Arlington, Arlington, TX 76019-0015, USA
Fausto Cavallaro: Department of Economics, Management, Society and Institutions (EGSI), University of Molise, Via De Sanctis, 86100 Campobasso, Italy

Sustainability, 2018, vol. 10, issue 7, 1-26

Abstract: The importance of sustainable innovation achievement propels firms to consider the economic, social, and environmental dimensions of sustainable development. However, it is important to clarify that not all innovations impact sustainable development. Regardless of the limited circumstances in small and medium-sized enterprises (SMEs), intrapreneurship, stakeholder integration, and absorptive capacity are firm-specific capabilities that could be explored as strategic intentions of management practices in the organization. This paper investigated the mediating role of process innovation in the relationship among the firm-specific capabilities of absorptive capacity, intrapreneurship, and stakeholder integration for sustainable innovation in SMEs. This empirical study examines the manufacturing sector of Indonesian SMEs with a sample size of 190 firms. The study found that practices of process innovation, as a mediator triggered by the firm-specific capabilities of absorptive capacity, intrapreneurship, and stakeholder integration affect sustainable innovation, although at low stages. Finally, implications for the theory and practice of attaining sustainable innovation in SMEs are drawn.

Keywords: sustainable innovation; firm-specific capabilities; process innovation (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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