Fueling SMEs’ product innovation through entrepreneurial passion during COVID-19: The role of dynamic capability and environmental opportunities

Abstract

COVID-19 may not only pose threats but also provided opportunities for innovation and growth for many high-tech small- and medium-sized enterprises (SMEs). This study investigates the relationship between entrepreneurial passion (EP), dynamic capability (DC) for innovation and product innovation performance in SMEs during COVID-19. Hierarchical regression and bootstrapping methods were employed per the survey data of 195 Chinese SMEs. The results reveal that EP is an imperative antecedent of DC and product innovation. DC also positively mediates the relationship between SMEs’ product innovation performance and top managers’ EP. In addition, this mediation effect of DC becomes more pronounced when firms are facing more opportunities. These findings advance the existing literature by specifying the process top managers use to cultivate product innovation within SMEs in times of crisis.