Some firms of Indian origin (FIOs) are striving hard to catch-up on their innovation capabilities (InnoCs) and enhance their export competitiveness (EC). Prior studies at IIT Bombay’s SJMSOM (such as the one done by Bhat and Momaya, 2020) have shown that InnoCs enhance EC and lead to superior export performance of firms in select contexts.
Briefly about the study
In this study, we wanted to systematically analyze when InnoCs can further enhance EC. We built upon and extended the competitiveness Assets-Processes-Performance (APP) framework (proposed by Momaya, 2001) and theorized that environmentally sustainable practices (ESPs) can moderate the relationship between InnoCs and EC.
Our preliminary findings indicate that firms which are ahead of the rest in terms of their ESPs fare better in terms of their EC. This relationship seems particularly strong in innovation-based industries such as software and pharmaceuticals.
Our study highlights the moderating effect of firm-level ESPs in the relationship between InnoCs and EC. Based on our preliminary findings, we extend two suggestions to the top management teams (TMT) of FIOs keen to improve their capabilities for EC.
We propose that the teams managing the innovation function and the ones involved in implementing ESPs should ideally work in close consultation with each other.
We propose that firms–even the ones focusing on cost leadership–should identify niche arenas where they can compete on differentiation so that they can earn better margins and spend more on capabilities related to innovation and ESPs.
Bhat, S., & Momaya, K. S. (2020). Innovation capabilities, market characteristics and export performance of EMNEs from India. European Business Review, 32(5), 801–822. https://doi.org/10.1108/EBR-08-2019-0175