Innovation Capabilities and Performance of Malaysian Agricultural SMEs: The Moderating Role of Strategic Alliance

Authors

  • Nurul Izni Kamalrulzaman Universiti Malaysia Terengganu
  • Azlinzuraini Ahmad Universiti Malaysia Terengganu
  • Akmalia Mohamad Ariff Universiti Malaysia Terengganu
  • Mohd Shaladdin Muda Universiti Malaysia Terengganu

DOI:

https://doi.org/10.33736/ijbs.3751.2021

Keywords:

Strategic Alliance, Innovation Capabilities, Firm Performance, Agricultural SMEs

Abstract

Small and Medium Enterprises (SMEs) in the agriculture sector in Malaysia are still seen to contribute only a small portion towards Gross Domestic Product (GDP) and the total number of the national workforce. As for agricultural SMEs, innovation activities are needed to produce quality agricultural-based products to meet the increasing of Malaysia and world market demand. Nevertheless, innovation among agricultural SMEs is still less encouraging. Hence, this study aims to investigate the effect of innovation capabilities towards performance of agricultural SMEs in Malaysia and determine the role of strategic alliance as a moderator in influencing the performance of agricultural SMEs. The conceptual framework of innovation capabilities is based on Resource-Based View Theory and Schumpeter Innovation Theory that considers strategic alliance will positively affect the relationship between innovation capabilities and SME performance. A total of 136 respondents from Agricultural SMEs were used for data analysis process using SmartPLS 3.0 software. The results show that innovation capabilities have a positive impact on the performance of SMEs, while strategic alliance does not affect the relationship between innovation capabilities and agricultural SME performance. Although strategic alliance has insignificant effect, this might be resulted from the emphasis of this study as it defined strategic alliances as acquisitions of companies. For agricultural SMEs in Malaysia, entrepreneurs need to look at an alliance from a positive perspective by looking it as a joint venture process in resource sharing that will benefit the enterprises, thus it is not only meant acquisition. The implication of this study is expected to contribute and enhance the role of innovation capabilities among entrepreneurs and strategic alliances in the Malaysian agricultural SMEs.

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Published

2021-08-12

How to Cite

Nurul Izni Kamalrulzaman, Azlinzuraini Ahmad, Akmalia Mohamad Ariff, & Mohd Shaladdin Muda. (2021). Innovation Capabilities and Performance of Malaysian Agricultural SMEs: The Moderating Role of Strategic Alliance. International Journal of Business and Society, 22(2), 675–695. https://doi.org/10.33736/ijbs.3751.2021