The Role of Entrepreneurial Orientation and Entrepreneurial Bricolage on Frugal Innovation and SMEs Sustainable Performance in Emerging Markets

Abstract

This study sought to investigate the impact of entrepreneurial orientation (EO) and entrepreneurial bricolage (EB) on frugal innovation (FI), and subsequently, the sustainable performance of small and medium-sized enterprises (SMEs) in emerging markets (EMs). Data were collected from 750 key decision-makers in manufacturing small and medium-sized enterprises (SMEs) in the cities of Dar es Salaam and Arusha, Tanzania, yielding a response rate of 51.47%. The data was analyzed using structural equation modeling in SmartPLS software. The results revealed that EO had a positive and significant effect on both FI and EB. Also, EB had a positive and significant effect on FI, which ultimately led to FI positively influencing SMEs’ sustainable performance. Furthermore, the study showed that EO is a strong driver of FI and SMEs’ sustainable performance when mediated by EB and FI, respectively. These findings indicate that firms operating in resource-constrained environments in EMs should emphasize the FI approach in combination with their strategic initiatives, such as EO and EB, to achieve SMEs’ sustainable performance. The theoretical and practical significance of this study is explained thoroughly. The study clarifies how entrepreneurial orientation and bricolage contribute to frugal innovation and the sustainable performance of SMEs in emerging markets. Additionally, it sheds light on a novel perspective regarding the relationship between entrepreneurial orientation, entrepreneurial bricolage, and SMEs’ sustainable performance through frugal innovation. Furthermore, the study provides a new perspective on developing countries such as Tanzania, which lacks empirical evidence on SMEs sustainable performance.