Addresses: Faculty of Economics and Business, Universitas Malikussaleh, Lhokeumawe, Aceh, 24351, Indonesia
Abstract: Small and medium enterprises (SMEs) are a business group which could survive when the economic crisis hit developing countries such as Indonesia. The purpose of the current study is to identify the enabling factors to innovativeness for SMEs in the emerging Indonesian market and to examine the relationship between innovativeness and business growth performance. Drawing upon the survey questionnaire data from 300 SMEs (with an acceptable response rate of 97.67%) in the Indonesian market, five research hypotheses are tested using a structural equation modelling technique. The results suggest that: first, the micro-environmental have a significant influence on firm's innovativeness and business growth performance, second, firm's innovativeness have a significant influence on firm's innovativeness, and finally, geographical clusters have a significant influence on firm's innovativeness and business growth performance. It is believed to be the first empirical research study examining SMEs' innovativeness and their business growth performance in the emerging Indonesian market.
Keywords: micro-environmental; geographical clusters; innovativeness; business growth performance.
International Journal of Business Innovation and Research, 2019 Vol.19 No.2, pp.204 - 231
Accepted: 16 Feb 2018
Published online: 03 Jun 2019 *