Determinants of frugal innovation for firms in emerging markets: the roles of leadership, knowledge sharing and collaborative culture

Purpose Due to the vital role of frugal innovation (FI) for firms in developing and emerging economies, the purpose of this study is to investigate the effect of transformational leadership (TL) and knowledge sharing (KS) on FI of firms in supply chains. This study aims to bring deeper insight on the correlation among the constructs by exploring and analyzing the moderating effect of collaborative culture (CC) in the KS-FI relationship. Design/methodology/approach The paper used the quantitative approach and structural equation modeling (SEM) to test the relationship among the latent factors in the proposed research model using data collected from 381 participants in 116 manufacturing and service firms. Findings The findings revealed that TL might be an important precursor to induce significant influences on FI directly or indirectly through its effect on active and passive KS processes in supply chains. In addition, the paper highlights the moderating role of CC in strengthening the impact of KS processes on FI. Research limitations/implications The paper provides a valuable understanding and novel approach for managers to improve firms' FI capability through leadership practice and KS processes. The research findings support the idea that FI capability of firms in developing and emerging nations will be significantly enhanced if leaders are interested in practicing TL style and fostering a climate of collaboration within organization. Originality/value This study contributes to bridging research gaps in the literature and advancing the insights of how TL directly and indirectly fosters FI via mediating roles of active and passive KS processes in supply chains under the climate of collaboration.