Mediating Role of Network Ties in the Relationship between Innovativeness, Proactiveness, and SMEs Performance

Abstract

This analysis examines the role of network connectivity as a mediator between innovative strength, positivity and performance from small and medium-sized enterprises (SMEs). Data were obtained by 305 subjects using structural questionnaires and data analysis using structural equation modelling for path analysis using STATA version 15 (PA-SEM). The results show that innovative capabilities have a positive and significant impact on small and medium-sized enterprise performance. Proactiveness was also identified as a key performance driver for small and medium-sized businesses. These findings show that network ties to SMEs is a performance mediator by providing access to important external additional resources, knowledge and opportunities from outside to improve their competitive advantage. Furthermore, these connections form the impact of innovative strength and proactiveness on performance, highlighting the importance of external relations in achieving business success. Research findings show that innovativeness, proactiveness and network ties are key predictors of performance outcomes for SMEs. Performance improvements from each factor are made directly and indirectly via network ties. This illustrates a complex role network to achieve better results.