Fueling innovation through information technology in SMEs

Clay Dibrell, Bond University
Peter S. Davis
Justin B. Craig, Bond University

Article comments

Dibrell, C., Davis, P.S. & Craig, J.B. (2008). Fueling innovation through information technology in SMEs. Journal of small business management, 46(2), 203-218.

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2008 HERDC submission. FoR: 1503

© Copyright International Council for Small Business, 2008

Abstract

This paper describes a study that investigates the mediating effects of information technology (IT) on the relationships among product and process innovations and firm performance (measured in multiple profitability and growth rate metrics). Using structural equation modeling on a sample of 397 small and medium-sized enterprises (SMEs), we find evidence that (1) increases on the strategic emphasis placed on innovation, both product and process, positively impact the prominence managers place on IT; (2) the impact of innovation (both product and process) on performance (both profitability and growth) is primarily indirect, felt via the mechanism of the importance managers place on IT; and (3) an increased emphasis on IT abets managers’ perception of their firms’ performance, as compared with that observed among peer firms (other SMEs).