Keelson, Solomon Abekah e al.
A icle
The in luence o ma ke compe i ion on SMEs'
pe o mance in eme ging economies: Does p ocess
inno a ion mode a e he ela ionship?
Economies
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Sugges ed Ci a ion: Keelson, Solomon Abekah e al. (2024) : The in luence o ma ke compe i ion on
SMEs' pe o mance in eme ging economies: Does p ocess inno a ion mode a e he ela ionship?,
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Ci a ion: Keelson, Solomon Abekah,
Ju aj Cúg, John Amoah, Zo a
Pe áko á, Jacob Odei Addo, and
Abdul Bashi u Jib il. 2024. The
In luence o Ma ke Compe i ion on
SMEs’ Pe o mance in Eme ging
Economies: Does P ocess Inno a ion
Mode a e he Rela ionship? Economies
12: 282. h ps://doi.o g/10.3390/
economies12110282
Academic Edi o : Ka a ina Valasko a
Recei ed: 6 Augus 2024
Re ised: 2 Oc obe 2024
Accep ed: 12 Oc obe 2024
Published: 22 Oc obe 2024
Copy igh : © 2024 by he au ho s.
Licensee MDPI, Basel, Swi ze land.
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A ibu ion (CC BY) license (h ps://
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4.0/).
economies
A icle
The In luence o Ma ke Compe i ion on SMEs’ Pe o mance
in Eme ging Economies: Does P ocess Inno a ion Mode a e
he Rela ionship?
Solomon Abekah Keelson 1, Ju aj Cúg2, John Amoah 1,*, Zo a Pe áko á3, Jacob Odei Addo 1
and Abdul Bashi u Jib il 4
1Depa men o Ma ke ing and S a egy, Tako adi Technical Uni e si y, Tako adi WH1851, Ghana;
[email p o ec ed] (S.A.K.); [email p o ec ed] (J.O.A.)
2Depa men o Economics, Facul y o Ope a ional and Economics o T anspo and Communica ions,
Uni e si y o Zilina, 010 26 Zilina, Slo akia; [email p o ec ed]
3Ins i u e o Fo ensic Enginee ing, Facul y o Ci il Enginee ing, Slo ak Uni e si y o Technology,
810 05 B a isla a, Slo akia; [email p o ec ed]
4School o Managemen and Economics, Uni e si y o Ku dis an Hewlê , 30 Me e A enue, E bil,
Ku dis an Region, I aq; [email p o ec ed]
*Co espondence: [email p o ec ed]
Abs ac : Small and medium en e p ises (SMEs) a e i al o he economic de elopmen o eme ging
economies, signi ican ly con ibu ing o employmen , inno a ion, and GDP g ow h. This s udy
in es iga es he in luence o ma ke compe i ion on SME pe o mance in eme ging economies,
speci ically examining he mode a ing ole o p ocess inno a ion. Using a sample o 365 SMEs in
he wes e n egion o Ghana, he esea ch employed a con enience sampling echnique o ga he
da a. The analysis u ilized pa ial leas squa e s uc u al equa ion modeling (PLS-SEM) o explo e he
ela ionships be ween ma ke compe i ion, p ocess inno a ion, and SME pe o mance. The indings
e ealed ha h ee di ec hypo heses we e suppo ed, indica ing a posi i e ela ionship be ween
ma ke compe i ion and SME pe o mance, while he mode a ed hypo heses we e no suppo ed.
These insigh s p o ide aluable implica ions o SME owne s, manage s, and policymake s.
Keywo ds: eme ging economies; inno a ion; ma ke compe i ion; SMEs
1. In oduc ion
Small and medium-sized en e p ises (SMEs) a e he backbone o eme ging economies,
playing a pi o al ole in economic de elopmen , job c ea ion, and inno a ion. SMEs
accoun o a signi ican po ion o o al business ac i i y and employmen . Fo ins ance,
in de eloping coun ies, SMEs con ibu e up o 60% o o al employmen and up o 40%
o GDP (Amoah e al. 2022). Thei lexibili y, adap abili y, and capaci y o inno a ion
make SMEs c ucial d i e s o economic g ow h and social p og ess (e.g., D o sky e al.
2024). SMEs also con ibu e o economic di e si ica ion by educing dependency on a
ew la ge indus ies o companies. They p o ide oppo uni ies o en ep eneu ship,
especially in u al and unde se ed a eas, and help o dis ibu e economic bene i s mo e
e enly ac oss socie y (Ayyaga i e al. 2011). Fu he mo e, SMEs a e o en mo e nimble
han la ge en e p ises, allowing hem o espond quickly o ma ke changes and adop
new echnologies, which is essen ial o os e ing a dynamic and compe i i e economic
en i onmen (No h e al. 2020;OECD 2019).
In many eme ging economies, SMEs play a c i ical ole in os e ing inno a ion
(Abdul-Azeez e al. 2024). They o en ope a e in niche ma ke s and a e mo e willing
o ake isks compa ed o la ge i ms, leading o he de elopmen o new p oduc s, se -
ices, and business models (Ta an e al. 2015;D o skýe al. 2023). This inno a i e capaci y
is c ucial o sus aining long- e m economic g ow h and compe i i eness in he global
Economies 2024,12, 282. h ps://doi.o g/10.3390/economies12110282 h ps://www.mdpi.com/jou nal/economies
Economies 2024,12, 282 2 o 19
ma ke (OECD 2019). Fu he mo e, while some esea ch has highligh ed he challenges
aced by SMEs in Ghana, such as limi ed access o inance, inadequa e in as uc u e, and
lack o manage ial skills (N iamoah e al. 2016), he e is insu icien explo a ion o how
hese challenges in e ac wi h ma ke compe i ion and he po en ial o p ocess inno a ion
o mi iga e nega i e impac s.
Despi e hei signi ican ole, SMEs ace in ense ma ke compe i ion, pa icula ly
om la ge i ms and o eign compe i o s, which poses subs an ial challenges o hei
sus ainabili y and g ow h (Liñán e al. 2020;Ka adag 2015). The compe i i e landscape
has been exace ba ed by globaliza ion, echnological ad ancemen s, and he eme gence o
new ma ke en an s, leading o inc eased p essu e on SMEs o inno a e and imp o e hei
ope a ional e iciencies (Ocloo e al. 2014). While some s udies ha e explo ed he impac
o ma ke compe i ion on SME pe o mance, he e is a no iceable gap in unde s anding
how p ocess inno a ion can mode a e his ela ionship. Speci ically, he lack o empi ical
esea ch ocusing on he Ghanaian con ex limi s he abili y o d aw ac ionable insigh s o
SME leade s and policymake s. As many SMEs s uggle o su i e beyond i e yea s o
ope a ions, unde s anding he in e play be ween ma ke compe i ion, p ocess inno a ion,
and pe o mance is c ucial o de eloping s a egies ha enhance hei compe i i eness
and sus ainabili y in an inc easingly challenging en i onmen (Selensky 2022).
This s udy aims o ill his gap by (1) examining he impac o ma ke compe i ion
on he pe o mance o SMEs in eme ging economies and (2) analyzing he mode a ing
e ec o p ocess inno a ion on he ela ionship be ween ma ke compe i ion and SME
pe o mance. By add essing his gap, he esea ch will p o ide aluable insigh s o SME
owne s, manage s, and policymake s, enabling hem o o mula e e ec i e s a egies ha
le e age inno a ion o enhance compe i i eness and pe o mance in he ace o ma ke
challenges. The o he sec ions o he pape a e he li e a u e e iew, heo e ical backg ound,
me hodology, discussions, and conclusion.
2. Li e a u e Re iew and Hypo heses De elopmen
2.1. Theo e ical Backg ound
The compe i i e ad an age heo y, p ima ily a icula ed by Michael Po e , posi s ha
i ms can achie e supe io pe o mance by adop ing s a egies ha allow hem o ou pe -
o m hei i als. This heo y is pa icula ly ele an o small and medium en e p ises
(SMEs), which o en ope a e in highly compe i i e en i onmen s whe e di e en ia ion and
cos leade ship a e c i ical o su i al and g ow h. This heo y emphasizes wo p ima y
ou es o compe i i e ad an age: cos leade ship and di e en ia ion (Po e 1990). Fi ms
ha achie e cos leade ship aim o become he lowes -cos p oduce s in hei indus y. This
s a egy in ol es minimizing p oduc ion cos s, op imizing supply chains, and achie ing
economies o scale. Fo SMEs, adop ing a cos leade ship s a egy can be challenging due
o hei limi ed esou ces and scale. Howe e , SMEs can s ill pu sue cos e iciency h ough
lean ope a ions, s a egic sou cing, and p ocess imp o emen s. Di e en ia ion in ol es
o e ing unique p oduc s o se ices ha a e alued by cus ome s and pe cei ed as dis inc
om hose o compe i o s. This can be achie ed h ough inno a ion, supe io quali y,
excep ional cus ome se ice, o b and epu a ion. SMEs o en le e age hei lexibili y
and close cus ome ela ionships o di e en ia e hemsel es in niche ma ke s. By ocusing
on specialized p oduc s o se ices, SMEs can c ea e a compe i i e edge ha la ge i ms
migh ind di icul o eplica e. Po e ’s heo y also in oduces he concep o he “ alue
chain”, which desc ibes he ull ange o ac i i ies equi ed o b ing a p oduc o se ice
om concep ion o deli e y. SMEs can analyze hei alue chain o iden i y ac i i ies whe e
hey can add he mos alue and gain a compe i i e ad an age. Fo example, imp o ing
inbound logis ics, enhancing p oduc design, o op imizing ma ke ing e o s can con-
ibu e o an SME’s compe i i e posi ion (Po e 1990). Po e ’s compe i i e ad an age
heo y p o ides a use ul lens o examining how SMEs in eme ging economies can na -
iga e compe i i e ma ke s. By ocusing on cos leade ship and di e en ia ion s a egies,
SMEs can iden i y a eas whe e hey can build and sus ain compe i i e ad an ages, e en
Economies 2024,12, 282 3 o 19
in esou ce-cons ained en i onmen s. Se e al s udies ha e applied he heo y in di e se
ways. Fo ins ance, Muazu and Abdulmalik (2021) applied his heo y o in o ma ion ech-
nology capabili ies and compe i i e ad an age, highligh ing he impo ance o inno a ion
in achie ing compe i i e ad an age. Again, Nguyen e al. (2021) also applied he heo y
in assessing he inancial pe o mance o SMEs in Vie nam. The esea ch ocused on how
SMEs can le e age compe i i e s a egies o enhance hei pe o mance, emphasizing he
ole o p ocess inno a ion in his dynamic. Fu he mo e, A sawan e al. (2022) posi ha
compe i i e ad an age heo y can be used o le e age knowledge-sha ing and inno a ion
cul u e in o SMEs’ sus ainabili y. By in eg a ing Po e ’s compe i i e ad an age heo y,
his s udy p o ides a comp ehensi e unde s anding o how SMEs can na iga e and h i e
in compe i i e ma ke s.
2.2. SMEs and Ma ke Compe i ion
Empi ical esea ch has ex ensi ely examined he impac o ma ke compe i ion on
he pe o mance o SMEs in a ious con ex s. This s udy p o ides insigh s in o how
compe i i e p essu es shape he ope a ional and s a egic decisions o SMEs, in luencing
hei o e all pe o mance. Se e al s udies ha e es ablished a link be ween he in ensi y o
ma ke compe i ion and SME pe o mance me ics such as p o i abili y, ma ke sha e, and
g ow h. Fo ins ance, a s udy by Na adda Gamage e al. (2020) ound ha SMEs ope a ing
in highly compe i i e ma ke s end o expe ience lowe p o i ma gins due o p ice wa s
and inc eased ope a ional cos s. Howe e , hese i ms o en epo highe inno a ion a es
as hey s i e o di e en ia e hemsel es and cap u e ma ke sha e. Simila ly, esea ch
by Jeong and Chung (2023) demons a ed ha SMEs in compe i i e indus ies show sig-
ni ican imp o emen s in e iciency and cus ome se ice as hey seek o main ain hei
ma ke posi ions.
Compe i ion also a ec s he su i al and exi a es o SMEs. A longi udinal s udy by
Oguh and Bello (2023) and Ka dos e al. (2024) e ealed ha high le els o compe i ion
lead o highe business ailu e a es among SMEs, pa icula ly hose ha lack he necessa y
esou ces and capabili ies o compe e e ec i ely. Howe e , he same s udy highligh ed ha
compe i ion se es as a na u al selec ion mechanism, os e ing he su i al o mo e esilien
and adap able i ms. Addi ionally, a s udy by Abdul (2019) showed ha compe i i e
p essu e encou ages SMEs o inno a e and di e si y hei p oduc o e ings, which can
enhance hei su i al p ospec s in he long un. The impac o compe i ion on SME
pe o mance a ies ac oss di e en egions and sec o s (Rua e al. 2018). Fo example,
a s udy by Ayyaga i e al. (2011) ound ha SMEs in de eloping coun ies ace unique
compe i i e challenges, such as in o mal sec o compe i ion and inadequa e in as uc u e,
which signi ican ly a ec hei pe o mance. In con as , SMEs in de eloped coun ies
bene i om mo e suppo i e egula o y en i onmen s and be e access o esou ces,
which can mi iga e he ad e se e ec s o compe i ion. Sec o al di e ences a e also e iden ,
wi h echnology-in ensi e indus ies expe iencing highe compe i i e p essu es and g ea e
inno a ion-d i en pe o mance ou comes compa ed o adi ional manu ac u ing sec o s
(Aud e sch 2002).
2.3. Ma ke Sha e Dis ibu ion
Ma ke sha e dis ibu ion e lec s he concen a ion o powe among i ms wi hin an
indus y, in luencing compe i i e dynamics and s a egic decision-making (Rosá io and
Raimundo (2024). The ela ionship be ween ma ke sha e dis ibu ion and he pe o mance
o small and medium-sized en e p ises (SMEs) has ga ne ed signi ican a en ion in e-
cen yea s (Quoc T ung 2021;Appiah Fening e al. 2008). This ela ionship is c i ical as
ma ke sha e is o en seen as a key indica o o a i m’s compe i i e posi ion and o e all
success. Below a e key indings om ecen s udies ha explo e his dynamic. A s udy by
Kha ak e al. (2024) emphasized ha a highe ma ke sha e o en leads o imp o ed pe o -
mance me ics o SMEs. The esea ch indica es ha i ms wi h la ge ma ke sha es can
bene i om economies o scale, which enable hem o educe cos s and enhance p o i abil-
Economies 2024,12, 282 4 o 19
i y. This inding is consis en wi h he no ion ha ma ke sha e is posi i ely co ela ed wi h
pe o mance, as i ms can le e age hei posi ion o nego ia e be e e ms wi h supplie s
and a ac mo e cus ome s. Resea ch conduc ed by Blundell e al. (1999) highligh s ha
ma ke sha e dis ibu ion signi ican ly in luences SMEs’ compe i i e ad an age. The s udy
ound ha SMEs wi h a subs an ial ma ke sha e a e be e posi ioned o in es in ma -
ke ing and inno a ion, which u he enhances hei pe o mance. The au ho s a gue ha
main aining a compe i i e ma ke sha e is c ucial o long- e m sus ainabili y and g ow h
in eme ging ma ke s.
Kueng e al. (2016,2017) a gued ha ma ke sha e dis ibu ion should be iewed as
a s a egic asse o SMEs’ pe o mance. The indings sugges ha i ms ha p io i ize
ma ke sha e dis ibu ion in hei s a egic planning end o ou pe o m hei compe i o s.
This is pa icula ly e iden in indus ies whe e cus ome loyal y and b and ecogni ion play
signi ican oles in d i ing sales. Resea ch by G ullon e al. (2019) sugges s ha indus ies
wi h concen a ed ma ke sha es o en expe ience less in ense compe i ion and highe ba -
ie s o en y o new i ms. Con e sely, agmen ed ma ke sha e dis ibu ions can lead o
p ice ola ili y and inc eased compe i i e p essu es (Baldau and Mollne 2021). Empi ical
s udies unde sco e he impo ance o ma ke sha e dis ibu ion in shaping SME s a egies.
Fo example, i ms wi h dominan ma ke posi ions may le e age economies o scale o
lowe cos s and main ain compe i i e p icing s a egies (Roy and Roy 2024;Gup a and
Go inda ajan 2017). The e o e, SMEs ope a ing in agmen ed ma ke s mus di e en ia e
hei o e ings h ough inno a ion o se ice quali y o cap u e ma ke sha e e ec i ely.
H1: The e is a posi i e ela ionship be ween ma ke sha e dis ibu ion and SME pe o mance.
2.4. Numbe o Ma ke Compe i o s
The numbe o compe i o s in a ma ke signi ican ly in luences SMEs’ compe i i e
s a egies, ma ke posi ioning, and o e all pe o mance. The impac o he numbe o
ma ke compe i o s on he pe o mance o small and medium-sized en e p ises (SMEs)
is a c i ical a ea o esea ch, pa icula ly in he con ex o dynamic and compe i i e en i-
onmen s. Resea ch indica es ha in highly compe i i e en i onmen s, SMEs o en ace
challenges such as p ice wa s, educed p o i ma gins, and in ensi ied p essu e o inno a e
(Na adda Gamage e al. 2020). A s udy by Clemen i and Palazzo (2016) and Makkonen e al.
(2014) highligh ed ha indus ies wi h a la ge numbe o compe i o s end o ha e highe
en y and exi a es, leading o dynamic ma ke condi ions whe e i ms mus con inually
adap o su i e. Ko ha i e al. (2013) a i med ha in eme ging economies, he p oli -
e a ion o compe i o s can be a ibu ed o ac o s such as lowe ba ie s o en y, apid
ma ke libe aliza ion, and echnological ad ancemen s. Fo ins ance, in he con ex o Asian
economies, he compe i i e landscape is cha ac e ized by a mul i ude o small and medium-
sized en e p ises compe ing igo ously o ma ke sha e (Pingali e al. 2023). O’Dwye
and Gilmo e (2019) examined how he numbe o compe i o s in luences SMEs’ cus ome
o ien a ion and pe o mance. Thei indings indica e ha in highly compe i i e ma ke s,
SMEs ha p io i ize cus ome engagemen and esponsi eness end o pe o m be e . The
s udy emphasizes ha compe i ion compels SMEs o ocus on cus ome needs, leading o
imp o ed cus ome sa is ac ion and loyal y, which a e c i ical o sus ained pe o mance.
Resea ch by Manzaneque-Lizano e al. (2019) discusses he long- e m implica ions o
ma ke compe i ion on SME sus ainabili y. The s udy ound ha while compe i ion can
d i e sho - e m pe o mance imp o emen s h ough inno a ion and cus ome ocus, i can
also lead o ma ke sa u a ion and inc eased exi a es among SMEs. The au ho s sugges
ha SMEs mus de elop sus ainable compe i i e s a egies ha allow hem o h i e in he
long e m, despi e he challenges posed by a high numbe o compe i o s.
H2: The e is a posi i e ela ionship be ween he numbe o compe i o s and SME pe o mance.
Economies 2024,12, 282 5 o 19
2.5. P oduc Inno a ion
P oduc inno a ion is c ucial o SMEs o s ay compe i i e and mee e ol ing cus-
ome demands. I in ol es he de elopmen and in oduc ion o new o imp o ed p od-
uc s/se ices o he ma ke (Ma ejun 2018). Resea ch highligh s se e al ac o s in luencing
p oduc inno a ion in SMEs. A s udy by Osei e al. (2016) ound a s ong posi i e co ela-
ion be ween p oduc inno a ions and he pe o mance o SMEs. Thei esea ch indica ed
ha SMEs ac i ely engaged in de eloping new p oduc s expe ience highe sales g ow h
and imp o ed ma ke sha e. The au ho s a gued ha p oduc inno a ion is essen ial o
SMEs o di e en ia e hemsel es in compe i i e ma ke s, leading o enhanced cus ome
sa is ac ion and loyal y. Also, a s udy by Zaka ia e al. (2016) examined he mode a ing
e ec o ma ke o ien a ion on he ela ionship be ween p oduc inno a ion and SME
pe o mance. The indings sugges ha SMEs wi h a s ong ma ke o ien a ion, ocusing
on cus ome needs and p e e ences, a e mo e likely o ansla e hei p oduc inno a ions
in o imp o ed pe o mance. The s udy emphasizes ha unde s anding ma ke demands is
c ucial o success ul inno a ion ou comes. Osei e al. (2016) highligh ed in hei s udies
ha SMEs wi h a s ong lea ning cul u e, which encou ages knowledge sha ing and adap-
a ion, a e be e able o le e age hei p oduc inno a ions o enhance pe o mance. This
sugges s ha o ganiza ional lea ning is a c i ical ac o in ansla ing inno a ion e o s in o
angible esul s. A ecen s udy by Hadi (2023) discusses he long- e m sus ainabili y o
SMEs h ough con inuous p oduc inno a ion. The au ho s a gued ha while sho - e m
pe o mance gains om p oduc inno a ion a e e iden , sus ained inno a ion e o s a e
necessa y o long- e m iabili y. The esea ch sugges s ha SMEs should de elop a cul u e
o inno a ion ha encou ages ongoing p oduc de elopmen o emain compe i i e in he
ma ke . Gi en his, he s udy p oposes he ollowing:
H3: The e is a posi i e ela ionship be ween p oduc inno a ion and SME pe o mance.
2.6. The Mode a ing Role o P ocess Inno a ion
P ocess inno a ion is a c i ical aspec o imp o ing ope a ional e iciency and enhanc-
ing he compe i i e posi ion o small and medium-sized en e p ises (SMEs). I e e s o
he implemen a ion o new o signi ican ly imp o ed p oduc ion o deli e y me hods,
which can lead o cos educ ions, inc eased p oduc i i y, and enhanced p oduc quali y
(Soese io e al. 2024). P ocess inno a ion is i al o he success and sus ainabili y o
SMEs. P ocess inno a ion, which encompasses imp o emen s in p oduc ion and ope a-
ional p ocesses, has been iden i ied as a c i ical ac o ha may mode a e his ela ionship.
Muha am e al. (2020) examined he e ec o p ocess inno a ion and ma ke inno a ion on
inancial pe o mance wi h he mode a ing ole o dis up i e echnology. Thei indings
sugges ha in highly compe i i e en i onmen s, SMEs ha adop p ocess inno a ions a e
be e equipped o enhance ope a ional e iciency and espond o ma ke demands. This
adap abili y leads o imp o ed pe o mance ou comes, indica ing ha p ocess inno a ion
can signi ican ly s eng hen he compe i i e posi ion o SMEs. A s udy by Da adkeh and
Mansoo (2023) ound ha in ense compe i ion d i es SMEs o inno a e hei p ocesses,
which in u n enhances hei pe o mance. The au ho s a gue ha p ocess inno a ion
ac s as a bu e , enabling SMEs o main ain hei pe o mance le els e en in challenging
compe i i e landscapes. Aliasgha e al. (2022) explo ed he sou ces o knowledge and
p ocess inno a ion using pe cei ed compe i i e in ensi y as a mode a ing ac o . Thei
indings indica ed ha SMEs wi h a highe abso p i e capaci y a e mo e likely o le e age
p ocess inno a ions o imp o e pe o mance in compe i i e ma ke s. This sugges s ha
p ocess inno a ion no only media es he ela ionship be ween compe i ion and pe o -
mance bu is also in luenced by he i m’s abili y o abso b and u ilize ex e nal knowledge.
A s udy by He as-Oli e e al. (2014) examined a ious inno a ion s a egies, including
p ocess inno a ion, and hei e ec s on SME pe o mance. The s udy ound ha while
p ocess inno a ion di ec ly impac s pe o mance, i s e ec i eness is mode a ed by ma ke
compe i ion. In a compe i i e en i onmen , SMEs ha ocus on p ocess inno a ion a e
Economies 2024,12, 282 6 o 19
mo e likely o achie e signi ican pe o mance imp o emen s compa ed o hose ha do
no p io i ize his a ea. Based on his, he s udy he e o e p oposes he ollowing:
H4a: P ocess inno a ion will signi ican ly mode a e he ela ionship be ween he numbe o
compe i o s and SME pe o mance.
H4b: P ocess inno a ion will signi ican ly mode a e he ela ionship be ween ma ke sha e dis i-
bu ion and SME pe o mance.
H4c: P ocess inno a ion will signi ican ly mode a e he ela ionship be ween p oduc inno a ion
and SME pe o mance.
2.7. SMEs Pe o mance
Small and medium en e p ises (SMEs) a e i al o economic g ow h, inno a ion, and
job c ea ion ac oss he globe. Howe e , hei pe o mance is in luenced by a ious ac o s,
including ma ke compe i ion, inno a ion, and s a egic o ien a ion. Ma ke compe i ion is
a signi ican de e minan o SME pe o mance. The in ensi y o compe i ion can compel
SMEs o inno a e and imp o e hei ope a ional e iciencies. Acco ding o Belás e al.
(2021) and S obodo a e al. (2024), compe i i e p essu es d i e SMEs o adop s a egic
o ien a ions ha enhance hei pe o mance. The s udy emphasizes ha SMEs ha engage
in p oac i e compe i i e s a egies, such as di e en ia ion and cos leade ship, end o
achie e be e ma ke ou comes. Heinicke (2018) ound ha SMEs ha p io i ize p ocess
inno a ion epo highe pe o mance le els. The s udy unde sco es he impo ance o
adop ing inno a i e p ac ices o imp o e ope a ional p ocesses and cus ome sa is ac ion.
Mo eo e , esea ch by Ca doni e al. (2023) sugges s ha p ocess inno a ion no only
imp o es p oduc i i y bu also enables SMEs o espond e ec i ely o changing ma ke
demands. Thei indings indica e ha SMEs ha in es in inno a i e p ocesses a e be e
posi ioned o compe e agains la ge i ms, he eby enhancing hei o e all pe o mance.
Resea ch by Haseeb e al. (2019) u he suppo s his no ion, indica ing ha SMEs acing
high ma ke compe i ion a e mo e likely o in es in inno a ion and p ocess imp o emen s.
The s udy highligh s ha compe i i e en i onmen s os e a cul u e o con inuous imp o e-
men , which is c ucial o sus aining business pe o mance. Empi ical s udies p o ide
aluable insigh s in o he ac o s in luencing SME pe o mance. Fo ins ance, a s udy
by Agyapong e al. (2024) analyzed he pe o mance o SMEs in Ghana and ound ha
hose adop ing s a egic o ien a ions ocused on inno a ion and ma ke esponsi eness
achie ed be e pe o mance ou comes. The indings sugges ha s a egic alignmen
wi h ma ke demands is c ucial o SME success. Addi ionally, a s udy by Sakib e al.
(2022) iden i ied key ac o s in luencing SME pe o mance, including s a egic o ien a ion,
esou ce alloca ion, and inno a ion capabili ies. The s udy emphasizes he impo ance o a
holis ic app oach ha conside s bo h in e nal capabili ies and ex e nal ma ke condi ions
in enhancing SME pe o mance (Popo iˇc e al. 2019).
Based on he abo e li e a u e e iew, he below p oposed concep ual amewo k
(Figu e 1) is ou lined as a guide o he p esen s udy.
Economies 2024,12, 282 7 o 19
Economies 2024, 12, x FOR PEER REVIEW 7 o 20
Figu e 1. P oposed concep ual amewo k o he s udy.
3. Me hodology
3.1. Da a Collec ion and Sampling
The s udy aims o explo e he in luence o ma ke compe i ion on he pe o mance o
small and medium en e p ises (SMEs) in eme ging economies, speci ically ocusing on he
mode a ing ole o p ocess inno a ion. To achie e his, a obus da a collec ion and sam-
pling s a egy is essen ial o ensu e he eliabili y and alidi y o he indings. This sec ion
ou lines he me hodologies ha we e employed o da a collec ion and he sampling ech-
niques u ilized in his esea ch. Using he concep ual amewo k, a ques ionnai e was c e-
a ed o es he s udy model and he sugges ed hypo heses. Two sec ions, A and B, made
up he ques ionnai e. Each esponden ’s pe sonal demog aphic in o ma ion was included
in Sec ion A, while Sec ion B included ques ions abou he s udy’s a iables. Ra he han
using a longi udinal app oach, which would ha e equi ed da a collec ion and analysis
on mul iple occasions, he c oss-sec ional esea ch design was chosen. The p ima y da a
collec ion me hod o his s udy was deployed h ough a s uc u ed ques ionnai e dis ib-
u ed o SME owne s and manage s in Ghana.
The a ge popula ion o his s udy includes SMEs ope a ing in a ious sec o s
wi hin Ghana, including manu ac u ing, se ices, and e ail. Acco ding o he Ghana S a-
is ical Se ice (2017), he e a e o e 1.5 million SMEs in he coun y, making hem a sig-
ni ican pa o he economy. A p e- es wi h o y- i e (45) pa icipan s was held be o e
he ques ionnai e’s inaliza ion o con i m he scales’ eliabili y. Acco ding o Hai e al.
(2019), ce ain ques ions we e emo ed and modi ied, while o he s ha did no mee he
accep able eliabili y h eshold we e kep . A e he ques ionnai e was e ised, he da a
collec ion p ocess go unde way. The esponden s who we e a ailable and p epa ed o
comple e he ques ionnai e we e chosen using con enience sampling. A combina ion o
offline and online app oaches was employed.
Be o e he ques ionnai e was dis ibu ed, i was made clea ha pa icipa ion in he
s udy was comple ely olun a y and con iden ial. The a ge ed esponden s ecei ed an
email wi h he Google link o he ques ionnai e ollowing he app o al o hei consen
(Amoah e al. 2022). The esponden s p o ided a o al o 365 alid esponses. Acco ding
o Hai e al. (2017) and Tabachnick and Fidell (2007), quan i a i e analysis needs a sample
size o 300 o mo e, which his s udy sa is ies. The da a collec ion pe iod spanned om
Janua y o May o 2024. Each esponden ook an a e age o wel e minu es o inish
SME pe o mance
P ocess inno a ion
Ma ke sha e dis ibu ion
P oduc inno a ion
Numbe o compe i o s
H4c
H4a
H3
H1
H2
H4b
Figu e 1. P oposed concep ual amewo k o he s udy.
3. Me hodology
3.1. Da a Collec ion and Sampling
The s udy aims o explo e he in luence o ma ke compe i ion on he pe o mance
o small and medium en e p ises (SMEs) in eme ging economies, speci ically ocusing on
he mode a ing ole o p ocess inno a ion. To achie e his, a obus da a collec ion and
sampling s a egy is essen ial o ensu e he eliabili y and alidi y o he indings. This
sec ion ou lines he me hodologies ha we e employed o da a collec ion and he sampling
echniques u ilized in his esea ch. Using he concep ual amewo k, a ques ionnai e was
c ea ed o es he s udy model and he sugges ed hypo heses. Two sec ions, A and B,
made up he ques ionnai e. Each esponden ’s pe sonal demog aphic in o ma ion was
included in Sec ion A, while Sec ion B included ques ions abou he s udy’s a iables.
Ra he han using a longi udinal app oach, which would ha e equi ed da a collec ion and
analysis on mul iple occasions, he c oss-sec ional esea ch design was chosen. The p ima y
da a collec ion me hod o his s udy was deployed h ough a s uc u ed ques ionnai e
dis ibu ed o SME owne s and manage s in Ghana.
The a ge popula ion o his s udy includes SMEs ope a ing in a ious sec o s wi hin
Ghana, including manu ac u ing, se ices, and e ail. Acco ding o he Ghana S a is ical
Se ice (2017), he e a e o e 1.5 million SMEs in he coun y, making hem a signi ican
pa o he economy. A p e- es wi h o y- i e (45) pa icipan s was held be o e he
ques ionnai e’s inaliza ion o con i m he scales’ eliabili y. Acco ding o Hai e al. (2019),
ce ain ques ions we e emo ed and modi ied, while o he s ha did no mee he accep able
eliabili y h eshold we e kep . A e he ques ionnai e was e ised, he da a collec ion
p ocess go unde way. The esponden s who we e a ailable and p epa ed o comple e
he ques ionnai e we e chosen using con enience sampling. A combina ion o o line and
online app oaches was employed.
Be o e he ques ionnai e was dis ibu ed, i was made clea ha pa icipa ion in he
s udy was comple ely olun a y and con iden ial. The a ge ed esponden s ecei ed an
email wi h he Google link o he ques ionnai e ollowing he app o al o hei consen
(Amoah e al. 2022). The esponden s p o ided a o al o 365 alid esponses. Acco ding o
Hai e al. (2017) and Tabachnick and Fidell (2007), quan i a i e analysis needs a sample
size o 300 o mo e, which his s udy sa is ies. The da a collec ion pe iod spanned om
Janua y o May o 2024. Each esponden ook an a e age o wel e minu es o inish
answe ing he ques ionnai e. To uphold he highes s anda ds o e hics and con iden ial-
i y, pa icipan s we e exp essly ins uc ed no o w i e hei names on he ques ionnai e
Economies 2024,12, 282 8 o 19
be o e o a e esponding. The su ey used a Like scale o measu e esponses, allow-
ing o quan i a i e analysis o he da a collec ed. This me hod has been widely used
in simila s udies o assess he ac o s in luencing SME pe o mance (Jib il e al. 2024;
Ocloo e al. 2014).
The PLS-SEM so wa e e sion was used o p ocess and assess he alid esponses
ha we e ecei ed. PLS-SEM was selec ed o his quan i a i e s udy due o he complexi y
o he model unde in es iga ion and he need o p ecise o ecas ing. I is a popula choice
in empi ical s udies because o i s adap abili y and sui abili y o explana o y esea ch,
pa icula ly in domains like s udies whe e ela ionships can be complex (Me zke e al.
2021). The esea che s can sys ema ically in es iga e, quan i y, and explain ela ionships
be ween a iables since he explana o y app oach is employed in his quan i a i e design.
Since es ing he hypo heses, pe o ming s a is ical analyses, and de i ing gene alizable
conclusions abou he ela ionships obse ed in his s udy we e he main objec i es, his
app oach was bene icial (Jib il e al. 2024).
3.2. Measu emen Scales
Fo he ques ionnai e, a i e-poin Like scale was c ea ed, wi h 1 deno ing s ong
ag eemen and 5 deno ing s ong disag eemen . The s udy’s cons uc s and ques ions we e
de i ed om se e al ela ed s udies: ma ke sha e dis ibu ion (Reibs ein and Fa is 1995;
Wilbu and Fa is 2014;Edeling and Himme 2018), numbe o compe i o s (Eibe Sø ensen
2009;Palacios-Ma qués e al. 2015;O’Dwye and Gilmo e 2019), p oduc inno a ion
(Liao and Ba nes 2015;Aksoy 2017), p ocess inno a ion (He as-Oli e e al. 2014;
He as-Oli e e al. 2016), and SME pe o mance (Aminu and Mohd Sha i 2015;Kee
and Rahman 2020;Wahyuni and Sa a 2020). On he side o he numbe o indica o s o
ques ions used pe cons uc , all o he cons uc s we e measu ed by i e ques ions o
indica o s each.
4. Empi ical Resul s
4.1. Da a and Resul s
The pa ial leas squa es s uc u al equa ion modeling (PLS-SEM) s a is ical echnique
e sion 4.0 was u ilized in his s udy o in es iga e he associa ions be ween la en a iables.
PLS-SEM was deployed in his s udy since i is eliable in p oducing accu a e esul s o
esea ch in domains like he social sciences and business, being especially well-sui ed o
s udies wi h in ica e heo e ical models and non-dis ibu ed da a (Hai e al. 2017). Fu -
he mo e, se e al me hodological de elopmen s ha e imp o ed PLS-SEM, including he
c oss- alida ed p edic i e abili y es (CVPAT), which aises he model’s p edic i e powe
and enables cons uc -le el benchma king. Because o his, esea che s who wan o model
and alida e concep s in hei s udies ind i o be a p e e ed op ion (Kinebe e al. 2023).
4.2. Assessmen o he Measu emen Model
A h ee-s age measu emen model ha included ac o loadings, con e gen alidi y,
and disc iminan alidi y was used o e alua e he ela ionship be ween la en a iables.
The deg ee o which he obse able a iables and unde lying ac o s a e ela ed is measu ed
by ac o loadings. To ensu e he goodness o he model i , he ac o loadings we e
ca e ully examined o loaded o hei espec i e a eas. Acco ding o Hai e al. (2014), e e y
loading sa is ied he minimal cu -o o 0.5. Nex , con e gen alidi y was assessed using he
a e age a iance ex ac ed (AVE), and in e nal consis ency and con e gen eliabili y we e
compu ed using me ics like C onbach’s alpha and composi e eliabili y (CR) (Hai e al.
2019). E e y model cons uc demons a ed s ong con e gen alidi y (see Table 1) and
me he ecommended h eshold o C onbach’s alpha (
≥
0.7), indica ing adequa e in e nal
consis ency. AVE calcula es he di e ence be ween he a iance a cons uc cap u es and
he a iance caused by measu emen e o . When he AVE is 0.5 o g ea e , indica ing ha
he cons uc accoun s o mo e han hal o he a ia ion in i s indica o s, his is gene ally
ega ded as accep able. This is essen ial o p o ing he alidi y o he cons uc . I is
Economies 2024,12, 282 15 o 19
Also, u u e s udies could apply a quali a i e app oach since he p esen s udy only used a
quan i a i e app oach.
Au ho Con ibu ions: Concep ualiza ion: S.A.K. and J.A.; me hodology, J.A. and A.B.J.; so wa e,
J.C., A.B.J. and J.A.; alida ion, Z.P., S.A.K., J.C. and J.O.A.; o mal analysis, J.A. and A.B.J.; in es-
iga ion, Z.P., J.A., J.O.A., J.C. and Z.P.; esou ces, J.C., Z.P., S.A.K., J.O.A. and J.A.; da a cu a ion,
A.B.J. and J.C.; w i ing—o iginal d a p epa a ion, S.A.K., J.C., J.A. and Z.P.; w i ing— e iew and
edi ing, Z.P., A.B.J. and S.A.K.; isualiza ion, S.A.K. and J.O.A.; supe ision, Z.P. and S.A.K.; p ojec
adminis a ion, S.A.K., J.A., J.C. and Z.P.; unding acquisi ion, J.C. and Z.P. All au ho s ha e ead and
ag eed o he published e sion o he manusc ip .
Funding: This esea ch was unded by an ou pu o he p ojec “The implemen a ion amewo k
and business model o he In e ne o Things, Indus y 4.0 and sma anspo ” wi h g an numbe
NFP313011BWN6, and he APC was unded by he UNIVERSITY OF ŽILINA.
In o med Consen S a emen : In o med consen was ob ained om all subjec s in ol ed in he s udy.
Da a A ailabili y S a emen : Da a a e a ailable upon easonable eques .
Acknowledgmen s: The con ibu ion is a pa ial ou pu o scien i ic p ojec VEGA 1/0409/23 “Fo en-
sic ma ke ing as a pla o m o objec i e empi ical suppo o manage ial decision-making p ocesses.”
We a e also g a e ul o he edi o -in-chie and he anonymous e iewe s o hei cons uc i e c i icism
ha helped in shaping he en i e manusc ip .
Con lic s o In e es : The au ho s decla e no con lic s o in e es .
Appendix A
Table A1. F-squa e.
Cons uc s F-Squa e ( 2)
Ma ke Sha e Dis ibu ion 0.023
Numbe o Compe i o s 0.079
P ocess Inno a ion 0.014
P oduc Inno a ion 0.065
SMEs Pe o mance
P ocess Inno a ion ×Ma ke Sha e
Dis ibu ion 0.007
P ocess Inno a ion ×P oduc Inno a ion 0.013
P ocess Inno a ion ×Numbe o Compe i o s 0.002
Table A2. Model i .
Cons uc s Sa u a ed Model Es ima ed Model
SRMR 0.068 0.068
d_ULS 0.873 0.890
d_G 0.497 0.512
Chi-squa e 916.164 957.344
NFI 0.854 0.848
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