Strategic Entrepreneurship Behaviour and the Explorative and Exploitative Innovation of SMEs

Abstract

Balancing explorative and exploitative innovations poses a significant challenge for small- and medium-sized enterprises (SMEs) due to resource limitations. Strategic entrepreneurship behaviour offers a potential solution; yet an understanding of specific behaviours fostering these innovations remains limited. This study proposes that strategic entrepreneurship behaviour, synthesised from innovation attitude, perceived innovation control and subjective innovation norms, influences SMEs' explorative and exploitative innovation activities. These innovation activities, in turn, are expected to impact new product development and market performance. Data collected, with government permission from 244 SMEs and analysed using SmartPLS, revealed significant effects of innovation attitude and perceived innovation control on both types of innovations. However, subjective innovation norms show no influence. Findings exhibit that explorative and exploitative innovation activities have a favourable influence on new product performance, with the latter significantly affecting the market performance. This study uniquely integrates strategic entrepreneurship behaviours from the Theory of Planned Behaviour and innovation activities from the resource-based view, promoting performance enhancement and offering insights into strategic management and policy formulation.