Innovation capability and SME performance in times of economic crisis: does government support moderate?

Abstract

Purpose Drawing on the dynamic capabilities theory, the purpose of this study is to empirically explore the moderating role of government support (GS) in the relationship between innovation capability (IC) and small and medium-sized enterprise (SME) performance in times of economic crisis. Design/methodology/approach The study adopted a descriptive research design and collected data from 234 SMEs drawn from the six geopolitical zones of Nigeria using a self-reported questionnaire. PLS-SEM was performed to test the hypotheses. Findings The results showed that IC was positively associated with SME performance. Further analysis indicated that GS had a strong positive impact on SME performance and positively moderated the relationship between IC and SME performance. Originality/value There is a paucity of studies that specifically explore the moderating role of GS in the relationship between IC and SME performance. This study contributes to the literature on SMEs by demonstrating the moderating effect of GS on the relationship between IC and SME performance in times of economic crisis. The study offers valuable insights into the vital role played by IC and GS in times of economic crisis.