The Impact of Strategic Competitive Innovation on the Financial Performance of SMEs during COVID-19 Pandemic Period

Abstract

Purpose: The purpose of this paper is to reveal the impact of strategic competitive innovation types on the financial performance of SMEs during a very critical period: the COVID-19 pandemic. Four strategic competitive innovation types are considered in this study: marketing innovation, organizational innovation, product innovation and processes innovation.

Design/methodology/approach: To examine empirically the relationship between strategic competitiveness and financial performance, data were collected from a sample of 426 Lebanese SMEs belonging to seven different sectors.

Findings: The empirical findings of principle component analysis model (PCA) and multiple regression model (MR) reveal that the ability to innovate is essential to an SME’s survival during a crisis. The results of this study confirm the existence of a positive impact of marketing innovation and processes innovation on the financial performance of SMEs during the COVID-19 pandemic.

Practical implications: Moreover, results suggest that, in Lebanese SMEs, product innovation and organizational innovation do not have any impact on the financial performance during the pandemic period.

Originality/value: This research focused on strategic competitive innovation as a broadly considered essential condition for the survival of SMEs during the COVID-19 crises.

Keywords: SME, Innovation, COVID-19, financial performance, competitiveness, strategic competitive innovation

JEL Classification: G01, G02, M1, I00, L16