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Research Article

Cross-level assessment of process innovation practices: an empirical approach to small and medium manufacturing enterprises in Southeast Asia

, , ORCID Icon & ORCID Icon
Received 14 Sep 2022, Accepted 30 Jul 2023, Published online: 05 Sep 2023
 

Abstract

Process innovation is the core that helps both firms and countries achieve development goals quickly and sustainably. However, how a country’s ecosystem aligns with the innovation development of domestic firms and reverses backwards is less discussed. This study examines how process innovation practices at different levels affect the firms’ and governments’ performance to build a global competitiveness roadmap. The data of 4,859 small and medium manufacturing firms in nine Southeast Asian countries are used to examine the critical process innovation practices at the firm level, then utilized the Global Competitiveness Index to determine whether the cross-level effects the relationship between process innovation practices and firms, and national competitiveness performance. A two-level hierarchical model shows that innovation investment positively impacts process innovation practices. Higher education, training, and labor market efficiency also have a cross-level influence on process innovation. Finally, firm performance is boosted by integrating process innovation with financial market growth and size. The contributions are: (1) demonstrating a direct and indirect impact of innovation investment on process innovation practices and (2) providing an in-depth look at the cross-level effect of process innovation on global competitiveness.

Résumé

L’innovation de processus est un élément central qui permet à la fois aux entreprises et aux pays d’atteindre rapidement et durablement les objectifs de développement. Toutefois, la manière dont l’écosystème d’un pays s’aligne sur le développement de l’innovation des entreprises nationales, et s’inverse, est moins étudiée. Cette étude examine comment les pratiques d’innovation de processus à différents niveaux affectent les performances des entreprises et des gouvernements afin d’élaborer une feuille de route pour la compétitivité. Les données de 4859 petites et moyennes entreprises manufacturières dans neuf pays d’Asie du Sud-Est sont utilisées pour examiner les pratiques critiques d’innovation de processus au niveau de l’entreprise, puis l’indice mondial de compétitivité, pour déterminer si leur croisement affecte la relation entre les pratiques d’innovation de processus et les entreprises, et la performance de la compétitivité nationale. Un modèle hiérarchique à deux niveaux montre que l’investissement dans l’innovation a un impact positif sur les pratiques d’innovation de processus. L’enseignement supérieur, la formation et l’efficacité du marché du travail ont également une influence transversale sur l’innovation des processus. Enfin, les performances des entreprises sont stimulées par l’intégration de l’innovation de processus à la croissance et à la taille des marchés financiers. Les contributions sont les suivantes : (1) démontrer un impact direct et indirect de l’investissement dans l’innovation sur les pratiques d’innovation de processus et (2) fournir une vision approfondie de l’effet transversal de l’innovation du processus sur la compétitivité mondiale.

Graphical abstract

    HIGHLIGHTS

  • Process innovation critically helps firms and countries achieve the development goals quickly and sustainably

  • This study examines how process innovation affects the SMEs’ and governments’ performance

  • A two-level hierarchical non-linear model, whereby firms at level-1 are nested in nations at level-2, is considered

  • Corporate research and development and formal staff training affect process innovation practices

  • Process innovation is associated with the cross-level effects of higher education and training and labor market efficiency

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Additional information

Funding

This study is partially funded by the National Science and Technology Council, Taiwan Grant Number NSTC 111-2221-E-468 -001 -, and University of Economics and Law, Vietnam National University Ho Chi Minh City, Vietnam.

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