Modelling the antecedents for export orientation, innovation capacity and performance for South African manufacturing SMEs

Abstract

especially in the areas of job and wealth creation (Lawless 2014; Mafini, Pooe & Loury-Okoumba 2016; Ngek & Van Aardt Smit 2013). For SMEs to continue making such contribution, they need to keep improving their performance in the face of shrinking markets and growing competition (Prasanna et al. 2019). This calls for SMEs to expand their markets by exploring Orientation: In order to improve performance, South African manufacturing small and medium-sized enterprises (SMEs) need to constantly look at expanding their markets by exploring export opportunities and innovating their products and services. Research purpose: The aim of this study was to model the antecedents for export orientation, innovation capacity and SME performance. Motivation for the study: Although the influence of export orientation and innovation capacity on firm performance is well established, this study has brought together these capabilities as well as SME absorptive capacity, knowledge management and entrepreneurial competence into one model. Research design, approach and method: The study adopted a quantitative research approach and employed a cross-sectional survey of 207 SMEs in South Africa. Structural equation modelling was employed for data analysis using AMOS 26.0. Main findings: Absorptive capacity and knowledge management capabilities are certainly significant capabilities that should be embedded in the SME business, in view of their role in positively influencing the development of export orientation and innovation capacity, and that the influence of entrepreneurial competence is not significant enough. The results of the study showed that the primary data collected and analysed fit the posited model. Practical/managerial implications: With SMEs seeking to enter the export market faced with a number of challenges as they begin to explore unchartered waters, the ability to learn and assimilate new knowledge will stand SMEs in good stead as they expand their markets beyond the present boundaries. Contribution/value-add: The study’s findings extend the principle of distributed focus of attention into a possible new theory called SME Export and Innovation Attention Theory.