The relationship between innovation capability and firm's performance in electronic companies, Vietnam

Abstract

The study aims to investigate the determinant factors in the organisation of a firm's innovative activities, and the impact of innovation capability on firm's performance of electronic firms in Ho Chi Minh city, Vietnam. How is the performance of electronic companies after delivering an innovation project? How will innovation capability affect firm's performance in electronic companies? This study aims to seek the answer of these questions. We employ a Structural Equation Model and the PLS technique in order to validate the theoretical model proposed in this study. With observation of 374 valid firms, based on Cronbach's Alpha analysis, EFA analysis, CFA analysis and SEM analysis, this study discovers 5 groups of factors including: (i) Institution factors; (ii) Attitude of leadership factors; (iii) Marketing factors; (iv) Technological resources factors; (v) Combination factors, which have direct impact on innovation capability of firms. There are 4 groups of factors that have positive impacts on financial performance of electronic firms, with descending order of importance as follows: (1) Attitude of leadership factors; (2) Quality of human resources factors; (3) Innovation capability; (4) Marketing activities factors. Research results are important implications for Government administrative agencies for business to consult and introduce effective support policies.