Effects of Innovation Capabilities on Organisational Sustainability: Evidence from an Emerging Economy

Abstract

The role of businesses in sustainable development gained increasingly more importance, together with the increasing speed of technological advancements, in addition to the economic effects of climate change, pandemics, disasters, and wars. The capabilities of businesses allowing them to adapt to environmental conditions to use their resources and turn them into productive outputs efficiently are considered critical factors in achieving sustainable competitive advantage. Therefore, the present study aimed to determine the effects of businesses’ marketing, process, organisational, and product innovation capabilities on corporate sustainability. The data used in the present study, which has an explanatory research design, were collected from managers of 452 SMEs in an emerging economy (Turkey) using the non-random quota sampling method. During the data collection, a survey was carried out on the manufacturing firms operating in Kocaeli, Sakarya, Düzce, Yalova, and Bolu provinces in a region called TR42 in the Eastern Marmara region, which is an important industrial region in Turkey. During the data analysis, SPSS was used to obtain the descriptive statistics, and AMOS to obtain the inferential statistics. Within this context, covariance-based Structural Equation Modelling (SEM) was utilised to test organisational sustainability’s causal relationships with variables constituting the innovation capabilities. The results achieved here suggest that marketing, process, corporate, and product innovation capabilities have an effect that increases organisational sustainability. Furthermore, the results indicate that marketing innovation capability had a higher impact on organisational sustainability than other capacities constituting the innovation capability. The present study offers important interpretations and conclusions for businesses which operate in an emerging economy at the level of SME to improve their sustainability objectives in terms of resource, capability, and environmental adaptation.