Management innovation, digital capacity and enterprise innovation performance

Purpose Small- and medium-sized enterprises (SMEs) are key players in economic activities. Yet little research focuses on their management innovation’s effect on innovation performance, this paper explores the impact of three sub-dimensions of management innovation (new organizational structure, new processes and new practices) on innovation performance (innovation outcome performance and innovation process performance) of SMEs in the manufacturing industry. It elucidates the mediating role of external knowledge search (search depth and search breadth) and identifies the moderating effect of digital capability. Design/methodology/approach By collecting primary data through a questionnaire survey, this paper employs Mplus and SPSS to analyze data. Findings This paper finds that management innovation positively affects innovation performance, with a greater impact on innovation outcome performance. Search breadth partially mediates the relationship between new organizational structure and innovation performance. Digital capability positively moderates the positive relationship between management innovation and external knowledge search. Originality/value The theoretical contribution of this study is to supplement the research on the consequences of management innovation and to improve the theoretical relationship between management innovation and external knowledge search based on firm behavior theory.