Knowledge transfer and innovation performance of small and medium enterprises (SMEs): An informal economy analysis

Abstract

SME operators in the informal sector of developing economies have a significant influence on their nation's economies through their involvement in international business relationships. However, the existing deficiency in the literature to show empirical relationships between knowledge transfer, from these SMEs and their international business partners, and innovation performance is a significant gap in the strategic management and international business literature. Therefore, this paper explores the link between knowledge transfer and innovation performance of informal economy SMEs that are involved in international business relationships. The study included a survey of 370 owners-managers and managers of small and medium enterprises in Nigeria's informal electronic market. Using Structural Equation Model (AMOS 22) this study shows that knowledge transfer dimensions, such as R&D and social networking, have varying levels of impact on innovation performance of informal sector SMEs. Knowledge transfer from training showed an inverse and insignificant relationship with innovation performance. The study established implications and recommendations that will be useful for theory and practice.