Relationship between innovation and performance: Impact of competitive intensity and the organizational slack

Abstract

Innovation is a key factor in organizational performance. Although the strategic theory has delivered the references to understand the relationships between these two variables, there are still many gaps that need to be filled, and more empirical validation is necessary. This study aimed to verify how the relationship between innovation and performance is affected by the presence of precursor variables such as competitive intensity and organizational slack. The study was carried out through an explanatory and cross-sectional investigation, by applying structural equation modeling (SEM) to a sample of SMEs in Bogotá (Colombia). The results make a relevant contribution to the literature on strategic management by showing that competitive intensity and organizational slack induce innovation and positively impact performance.