Financial Orientation, Product Innovation and Firm Performance — An Empirical Study in the Japanese SMEs

Abstract

Research into product innovation and financial orientation in the small and medium enterprises (SMEs) is burgeoning, yet our understanding of the finance product innovation and performance remains unclear. Given the lack of empirical research on the role of financial orientation on innovation performance in the SMEs, especially in an Asian context, the current study addresses the relationships between financial orientation, product innovation and business performance in the Japanese SMEs, because it has a long established record on product innovation. Data were generated from 189 Japanese businesses and the results were analyzed using multiple regression. Results confirm the study hypotheses. Implications for management are discussed, along with suggestions for further research.