The moderating effect of economic development on the relationships between knowledge spillovers, digital capabilities, performance and innovation of firms

Document Type : Original Article

Author

Department of Accounting, Gorgan Branch, Islamic Azad University, Gorgan, Iran.

Abstract
Purpose: In today's world, the implementation of digital technologies in business sectors is increasingly important. The purpose of this study is to analyze the effects of knowledge spillovers on firm performance, with a focus on the mediating roles of digital capabilities and innovation. Additionally, the study examines the moderating role of the country's level of economic development on these relationships.
Methodology: This research adopts a quantitative approach, using data collected via questionnaires distributed to senior and middle managers at companies located in industrial zones. The sample size was determined to be 120 using Cochran's formula. Partial Least Square Structural Equation Modeling (PLS-SEM) was employed to test the mediating model explaining business performance.
Findings: Knowledge spillovers have a positive, significant impact on firm performance through digital capabilities and innovation. Furthermore, the country's level of economic development acts as a moderating factor, influencing both the direct and indirect effects of knowledge spillovers on firm performance.
Originality/Value: This study proposes a novel conceptual model to analyze the interactions among knowledge spillovers, digital capabilities, and innovation. The insights provided can serve as valuable guidance for business managers in leveraging knowledge resources, enhancing digital capabilities, and fostering organizational innovation to optimize firm performance.

Keywords

Subjects


[1]     Aparicio, S., Urbano, D., & Audretsch, D. (2016). Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence. Technological forecasting and social change, 102, 45–61. https://doi.org/10.1016/j.techfore.2015.04.006
[2]     Audretsch, D. B., & Thurik, A. R. (2000). Capitalism and democracy in the 21st Century: From the managed to the entrepreneurial economy. Journal of evolutionary economics, 10(1), 17–34. https://doi.org/10.1007/s001910050003
[3]     Ben Youssef, A., Boubaker, S., & Omri, A. (2018). Entrepreneurship and sustainability: The need for innovative and institutional solutions. Technological forecasting and social change, 129, 232–241. https://doi.org/10.1016/j.techfore.2017.11.003
[4]     Acs, Z. J., Stam, E., Audretsch, D. B., & O’Connor, A. (2017). The lineages of the entrepreneurial ecosystem approach. Small business economics, 49(1), 1–10. https://doi.org/10.1007/s11187-017-9864-8
[5]     Monitor, G. E. (2020). GEM Global Report 2019/2020. https://www.babson.edu/media/babson/assets/global-entrepreneurship-monitor/2019-2020-GEM-Global-Report.pdf
[6]     Caiazza, R., Belitski, M., & Audretsch, D. B. (2020). From latent to emergent entrepreneurship: the knowledge spillover construction circle. The journal of technology transfer, 45(3), 694–704. https://doi.org/10.1007/s10961-019-09719-y
[7]     Audretsch, D. B., & Keilbach, M. (2007). The Theory of Knowledge Spillover Entrepreneurship. Journal of management studies, 44(7), 1242–1254. https://doi.org/10.1111/j.1467-6486.2007.00722.x
[8]     Acs, Z. J., Audretsch, D. B., & Lehmann, E. E. (2013). The knowledge spillover theory of entrepreneurship. Small business economics, 41(4), 757–774. https://doi.org/10.1007/s11187-013-9505-9
[9]     Audretsch, D. B. (2007). Entrepreneurship capital and economic growth. Oxford review of economic policy, 23(1), 63–78. https://doi.org/10.1093/oxrep/grm001
[10]   Loureiro, R., Ferreira, J. J. M., & Simões, J. (2021). Approaches to measuring dynamic capabilities: Theoretical insights and the research agenda. Journal of engineering and technology management, 62, 101657. https://doi.org/10.1016/j.jengtecman.2021.101657
[11]   Heredia, J., Castillo-Vergara, M., Geldes, C., Carbajal Gamarra, F. M., Flores, A., & Heredia, W. (2022). How do digital capabilities affect firm performance? The mediating role of technological capabilities in the "New normal". Journal of innovation & knowledge, 7(2), 100171. https://doi.org/10.1016/j.jik.2022.100171
[12]   Zhen, Z., Yousaf, Z., Radulescu, M., & Yasir, M. (2021). Nexus of digital organizational culture, capabilities, organizational readiness, and innovation: Investigation of SMEs operating in the digital economy. Sustainability, 13(2). https://doi.org/10.3390/su13020720
[13]   Schmidt, S. (2015). Balancing the spatial localisation ‘Tilt’: Knowledge spillovers in processes of knowledge-intensive services. Geoforum, 65, 374–386. https://doi.org/10.1016/j.geoforum.2015.05.009
[14]   Martínez-Caro, E., Cegarra-Navarro, J. G., & Alfonso-Ruiz, F. J. (2020). Digital technologies and firm performance: The role of digital organisational culture. Technological forecasting and social change, 154, 119962. https://doi.org/10.1016/j.techfore.2020.119962
[15]   Drnevich, P. L., & Croson, D. C. (2013). Information technology and business-level strategy: Toward an integrated theoretical perspective. MIS quarterly, 37(2), 483–510. https://doi.org/10.25300/MISQ/2013/37.2.08
[16]   Usai, A., Fiano, F., Messeni Petruzzelli, A., Paoloni, P., Farina Briamonte, M., & Orlando, B. (2021). Unveiling the impact of the adoption of digital technologies on firms’ innovation performance. Journal of business research, 133, 327–336. https://doi.org/10.1016/j.jbusres.2021.04.035
[17]   Audretsch, D. B. (1995). Innovation and Industry Evolution. Routledge. https://books.google.nl/books?id=xbGbfSQWRMMC
[18]   Audretsch, D. B., & Belitski, M. (2013). The missing pillar: The creativity theory of knowledge spillover entrepreneurship. Small business economics, 41(4), 819–836. https://doi.org/10.1007/s11187-013-9508-6
[19]   Audretsch, D. B., Obschonka, M., Gosling, S. D., & Potter, J. (2017). A new perspective on entrepreneurial regions: Linking cultural identity with latent and manifest entrepreneurship. Small business economics, 48(3), 681–697. https://doi.org/10.1007/s11187-016-9787-9
[20]   Proeger, T. (2020). Knowledge spillovers and absorptive capacity—institutional evidence from the "German mittelstand". Journal of the knowledge economy, 11(1), 211–238. https://doi.org/10.1007/s13132-018-0539-8
[21]   Yi, L., Wang, Y., Upadhaya, B., Zhao, S., & Yin, Y. (2021). Knowledge spillover, knowledge management capabilities, and innovation among returnee entrepreneurial firms in emerging markets: Does entrepreneurial ecosystem matter? Journal of business research, 130, 283–294. https://doi.org/10.1016/j.jbusres.2021.03.024
[22]   Shu, C., Liu, C., Gao, S., & Shanley, M. (2014). The knowledge spillover theory of entrepreneurship in alliances. Entrepreneurship theory and practice, 38(4), 913–940. https://doi.org/10.1111/etap.12024
[23]   Colombelli, A., & Quatraro, F. (2019). Green start-ups and local knowledge spillovers from clean and dirty technologies. Small business economics, 52(4), 773–792. https://doi.org/10.1007/s11187-017-9934-y
[24]   Ghio, N., Guerini, M., Lehmann, E. E., & Rossi-Lamastra, C. (2015). The emergence of the knowledge spillover theory of entrepreneurship. Small business economics, 44(1), 1–18. https://doi.org/10.1007/s11187-014-9588-y
[25]   Antonelli, C. (2019). The knowledge growth regime: A schumpeterian approach. Springer international publishing. https://books.google.nl/books?id=mU-NDwAAQBAJ
[26]   Acs, Z. J., Braunerhjelm, P., Audretsch, D. B., & Carlsson, B. (2009). The knowledge spillover theory of entrepreneurship. Small business economics, 32(1), 15–30. https://doi.org/10.1007/s11187-008-9157-3
[27]   Barroso, C., Carrión, G. C., & Roldán, J. L. (2010). Applying maximum likelihood and PLS on different sample sizes: Studies on SERVQUAL model and employee behavior model. Handbook of partial least squares: Concepts, methods and applications (pp. 427–447). Berlin, Heidelberg: Springer Berlin Heidelberg. https://doi.org/10.1007/978-3-540-32827-8_20
[28]   Audretsch, D. B., & Keilbach, M. (2008). Resolving the knowledge paradox: Knowledge-spillover entrepreneurship and economic growth. Research policy, 37(10), 1697–1705. https://doi.org/10.1016/j.respol.2008.08.008
[29]   Lee, I. H., Hong, E., & Sun, L. (2013). Regional knowledge production and entrepreneurial firm creation: Spatial dynamic analyses. Journal of business research, 66(10), 2106–2115. https://doi.org/10.1016/j.jbusres.2013.02.037
[30]   Iftikhar, M. N., Ahmad, M., & Audretsch, D. B. (2020). The knowledge spillover theory of entrepreneurship: The developing country context. International entrepreneurship and management journal, 16(4), 1327–1346. https://doi.org/10.1007/s11365-020-00667-w
[31]   Lattacher, W., Gregori, P., Holzmann, P., & Schwarz, E. J. (2021). Knowledge spillover in entrepreneurial emergence: A learning perspective. Technological forecasting and social change, 166, 120660. https://doi.org/10.1016/j.techfore.2021.120660
[32]   Ramadani, V., Abazi-Alili, H., Dana, L. P., Rexhepi, G., & Ibraimi, S. (2017). The impact of knowledge spillovers and innovation on firm-performance: Findings from the Balkans countries. International entrepreneurship and management journal, 13(1), 299–325. https://doi.org/10.1007/s11365-016-0393-8
[33]   Fernandes, C. I., & Ferreira, J. J. M. (2013). Knowledge spillovers: Cooperation between universities and KIBS. R&D management, 43(5), 461–472. https://doi.org/10.1111/radm.12024
[34]   Montoro‐Sánchez, A., Ortiz‐de‐Urbina‐Criado, M., & Mora‐Valentín, E. M. (2011). Effects of knowledge spillovers on innovation and collaboration in science and technology parks. Journal of knowledge management, 15(6), 948–970. https://doi.org/10.1108/13673271111179307
[35]   De Clercq, D., Hessels, J., & van Stel, A. (2008). Knowledge spillovers and new ventures’ export orientation. Small business economics, 31(3), 283–303. https://doi.org/10.1007/s11187-008-9132-z
[36]   Falvey, R., Foster, N., & Greenaway, D. (2004). Imports, exports, knowledge spillovers and growth. Economics letters, 85(2), 209–213. https://doi.org/10.1016/j.econlet.2004.04.007
[37]   Bloom, N., Eifert, B., Mahajan, A., McKenzie, D., & Roberts, J. (2013). Does management matter? Evidence from India. The quarterly journal of economics, 128(1), 1–51. https://doi.org/10.1093/qje/qjs044
[38]   De Faria, P., & Lima, F. (2012). Interdependence and spillovers: Is firm performance affected by others’ innovation activities? Applied economics, 44(36), 4765–4775. https://doi.org/10.1080/00036846.2011.560108
[39]   Ornaghi, C. (2006). Spillovers in product and process innovation: Evidence from manufacturing firms. International journal of industrial organization, 24(2), 349–380. https://doi.org/10.1016/j.ijindorg.2005.07.002
[40]   Bernal, P., Carree, M., & Lokshin, B. (2022). Knowledge spillovers, R&D partnerships and innovation performance. Technovation, 115, 102456. https://doi.org/10.1016/j.technovation.2022.102456
[41]   Eisenhardt, K. M., & Martin, J. A. (2017). Dynamic capabilities: What are they? The sms blackwell handbook of organizational capabilities (pp. 341–363). https://doi.org/10.1002/9781405164054.ch21
[42]   Wang, C. L., & Ahmed, P. K. (2007). Dynamic capabilities: A review and research agenda. International journal of management reviews, 9(1), 31–51. https://doi.org/10.1111/j.1468-2370.2007.00201.x
[43]   Malhotra, A., Mathur, A., Diddi, S., & Sagar, A. D. (2022). Building institutional capacity for addressing climate and sustainable development goals: Achieving energy efficiency in India. Climate policy, 22(5), 652–670. https://doi.org/10.1080/14693062.2021.1984195
[44]   DeSarbo, W. S., Anthony Di Benedetto, C., Song, M., & Sinha, I. (2005). Revisiting the Miles and Snow strategic framework: uncovering interrelationships between strategic types, capabilities, environmental uncertainty, and firm performance. Strategic management journal, 26(1), 47–74. https://doi.org/10.1002/smj.431
[45]   Lyytinen, K., Yoo, Y., & Boland Jr., R. J. (2016). Digital product innovation within four classes of innovation networks. Information systems journal, 26(1), 47–75. https://doi.org/10.1111/isj.12093
[46]   Vial, G. (2019). Understanding digital transformation: A review and a research agenda. The journal of strategic information systems, 28(2), 118–144. https://doi.org/10.1016/j.jsis.2019.01.003
[47]   Karimi, J., & Walter, Z. (2015). The role of dynamic capabilities in responding to digital disruption: A factor-based study of the newspaper industry. Journal of management information systems, 32(1), 39–81. https://doi.org/10.1080/07421222.2015.1029380
[48]   Sutherland, W., & Jarrahi, M. H. (2018). The sharing economy and digital platforms: A review and research agenda. International journal of information management, 43, 328–341. https://doi.org/10.1016/j.ijinfomgt.2018.07.004
[49]   De Bondt, R. (1997). Spillovers and innovative activities. International journal of industrial organization, 15(1), 1–28. https://doi.org/10.1016/s0167-7187(96)01023-5
[50]   Frenken, K., Oort, F., & Verburg, T. (2007). Related variety, unrelated variety and regional economic growth. Regional studies, 41. https://doi.org/10.1080/00343400601120296
[51]   Audretsch, D. B., & Feldman, M. P. (2004). Chapter 61-Knowledge spillovers and the geography of innovation. Cities and geography (Vol. 4, pp. 2713–2739). Elsevier. https://doi.org/10.1016/S1574-0080(04)80018-X
[52]   Breschi, S., & Lissoni, F. (2001). Knowledge Spillovers and Local Innovation Systems: A Critical Survey. Industrial and corporate change, 10(4), 975–1005. https://doi.org/10.1093/icc/10.4.975
[53]   Rodríguez-Pose, A., & Crescenzi, R. (2008). Research and development, spillovers, innovation systems, and the genesis of regional growth in Europe. Regional studies, 42(1), 51–67. https://doi.org/10.1080/00343400701654186
[54]   Beise, M., & Stahl, H. (1999). Public research and industrial innovations in Germany. Research policy, 28(4), 397–422. https://doi.org/10.1016/S0048-7333(98)00126-7
[55]   Bode, E. (2004). The spatial pattern of localized R&D spillovers: an empirical investigation for Germany. Journal of economic geography, 4(1), 43–64. https://doi.org/10.1093/jeg/4.1.43
[56]   Andersson, M., & Karlsson, C. (2007). Knowledge in regional economic growth—the role of knowledge accessibility. Industry and innovation, 14(2), 129–149. https://doi.org/10.1080/13662710701252450
[57]   Funke, M., & Niebuhr, A. (2005). Regional geographic research and development spillovers and economic growth: Evidence from West Germany. Regional studies, 39(1), 143–153. https://doi.org/10.1080/0034340052000321904
[58]   Fu, X., Fu, X., Ghauri, P., & Hou, J. (2022). International collaboration and innovation: Evidence from a leading Chinese multinational enterprise. Journal of world business, 57(4), None. 10.1016/j.jwb.2022.101329
[59]   Fainshmidt, S., Pezeshkan, A., Lance Frazier, M., Nair, A., & Markowski, E. (2016). Dynamic capabilities and organizational performance: A meta-analytic evaluation and extension. Journal of management studies, 53(8), 1348–1380. https://doi.org/10.1111/joms.12213
[60]   Dokko, J., Mumford, M. (2015). Workers and the online gig economy. A hamilton project framing paper. https://www.hamiltonproject.org/assets/files/workers_and_the_online_gig_economy.pdf
[61]   Leung, T. Y., Sharma, P., Adithipyangkul, P., & Hosie, P. (2020). Gender equity and public health outcomes: The COVID-19 experience. Journal of business research, 116, 193–198. https://doi.org/10.1016/j.jbusres.2020.05.031
[62]   Kargar Shouraki, M. (2022). Digital sustainable human resource management model: Based on dynamic capabilities. Management studies in development and evolution, 31(105), 65–101. https://doi.org/10.22054/jmsd.2022.66456.4113
[63]   Mahdloo Torkaman MR, Asadi H, A. A. (2022). The role of economic development in maintaining the Islamic system from the perspective of jurisprudence and law. Economic jurisprudence studies. 4(2), 147-163. (In Persian). https://ensani.ir/file/download/article/1665913657-10411-1401-2-9.pdf
[64]   Moayya, A., Otarkhani, A., Rezaeian, A., & Hajipour, B. (2022). A framework drivers of business model innovation. Management studies in development and evolution, 31(103), 71–96. https://doi.org/10.22054/jmsd.2022.59700.3909
[65]   Hajizade,  P., Hasanabadi, I., & Panahi, J. (2022). increase the performance of the company through innovation and implementing market intelligence. Business intelligence management studies, 10(39), 97–126. https://doi.org/10.22054/ims.2021.60932.1966
[66]   Shahabadi,  A., Jafari, M., & Davarikish, R. (2020). The effect of absorption of knowledge spillover based economy on iran’s banking sector development. Quarterly journal of quantitative economics (JQE), 17(1), 61–84. https://doi.org/10.22055/jqe.2019.27761.1982
[67]   Arcos-Guanga, A., Flor-Unda, O., Novillo-Villegas, S., & Acosta-Vargas, P. (2024). The impact of knowledge spillovers on economic growth from a national perspective: A comprehensive analysis. Sustainability, 16(15). https://doi.org/10.3390/su16156537
[68]   Avelar, S., Borges-Tiago, T., Almeida, A., & Tiago, F. (2024). Confluence of sustainable entrepreneurship, innovation, and digitalization in SMEs. Journal of business research, 170, 114346. https://doi.org/10.1016/j.jbusres.2023.114346
[69]   Argyropoulou, M., Garcia, E., Nemati, S., & Spanaki, K. (2023). The effect of IoT capability on supply chain integration and firm performance: An empirical study in the UK retail industry. Journal of enterprise information management, 37(3), 875–902. https://doi.org/10.1108/JEIM-06-2022-0219
[70]   Dzwigol, H., Kwilinski, A., Lyulyov, O., & Pimonenko, T. (2023). Renewable energy, knowledge spillover and innovation: Capacity of environmental regulation. Energies, 16(3), 1117. https://doi.org/10.3390/en16031117
[71]   Yang, F., Yuan, P., & Jiang, G. (2022). Knowledge spillovers, institutional environment, and entrepreneurship: Evidence from China. Sustainability, 14(22), 14938. https://doi.org/10.3390/su142214938
[72]   Jeong, J., Choi, D., & Kim, J. (2022). When digital capabilities of MNC subsidiaries matters: The moderating effect of subsidiary autonomy in Korea. Sustainability, 14(22), 15176. https://doi.org/10.3390/su142215176
[73]   Petraite, M., Mubarak, M. F., Rimantas, R., & von Zedtwitz, M. (2022). The role of international networks in upgrading national innovation systems. Technological forecasting and social change, 184(C). 10.1016/j.techfore.2022.121873
[74]   Ferreira, J. J., Fernandes, C. I., Veiga, P. M., & Dooley, L. (2023). The effects of entrepreneurial ecosystems, knowledge management capabilities, and knowledge spillovers on international open innovation. R&D management, 53(2), 322–338. https://doi.org/10.1111/radm.12569
[75]   Ferreira, J., Fernandes, C. I., & Ferreira, F. A. F. (2020). Wearing failure as a path to innovation. Journal of business research, 120(C), 195–202. https://doi.org/10.1016/j.jbusres.2020.08.006
[76]   Santos, E., Fernandes, C. I., & Ferreira, J. J. (2020). The moderating effects of economic development on innovation and shadow entrepreneurship: Grey or pink? R&D management, 50(5), 599–613. https://doi.org/10.1111/radm.12404
[77]   Hair, J. F., Howard, M. C., & Nitzl, C. (2020). Assessing measurement model quality in PLS-SEM using confirmatory composite analysis. Journal of business research, 109, 101–110. https://doi.org/10.1016/j.jbusres.2019.11.069
[78]   Venkatesh, V., Thong, J. Y. L., & Xu, X. (2012). Consumer acceptance and use of information technology: Extending the unified theory of acceptance and use of technology. MIS quarterly, 36(1), 157–178. https://doi.org/10.2307/41410412
[79]   Forliano, C., Bullini Orlandi, L., Zardini, A., & Rossignoli, C. (2023). Technological orientation and organizational resilience to Covid-19: The mediating role of strategy’s digital maturity. Technological forecasting and social change, 188, 122288. https://doi.org/10.1016/j.techfore.2022.122288
[80]   Fornell,  Claes, & Larcker,  David F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of marketing research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
[81]   Sarstedt, M., Ringle, C., & Hair, J. (2017). Treating unobserved heterogeneity in PLS-SEM: A multi-method approach. European journal of marketing (pp. 197–217). https://doi.org/10.1007/978-3-319-64069-3_9