Product and business process innovation, competitive advantage and export performance

Abstract

Purpose: This paper aims to contribute to the understanding of the relationship between innovation and export performance by examining the effect of different types of innovation on export performance and testing the assumption underlying most studies in the field that competitive advantage mediates this relationship. Design/methodology/approach: From the literature review, we propose a research model which is estimated using a sample of 200 Spanish exporting manufacturing companies. Data for this study were collected with an ad-hoc questionnaire, and the partial least squares structural equation modeling (PLS-SEM) technique was chosen to analyze the data. Findings: The results show that there is a positive relationship between product and business process innovation and export performance and that competitive advantage mediates this relationship, but only when it is based on costs, not on differentiation. Originality/value: This paper provides evidence that product and business process innovation are positively related to export performance and that competitive advantage mediates these relationships, but only when the advantage is low-cost. Unexpectedly, we find that differentiation is neither related to export performance nor explains the relationship between innovation and export performance.