Persistence of SME Innovation Drivers Under Disruption: Longitudinal Evidence from a European Peripheral Region

Francisco Javier  Miranda González; Sergio Rubio Lacoba; Antonio Chamorro-Mera

doi:10.4067/s0718-2724202600025079

Authors

Francisco Javier Miranda González Departamento de Dirección de Empresas y Sociología, Universidad de Extremadura , Badajoz, Spain.
Sergio Rubio Lacoba Departamento de Dirección de Empresas y Sociología, Universidad de Extremadura , Badajoz, Spain.
Antonio Chamorro-Mera Departamento de Dirección de Empresas y Sociología, Universidad de Extremadura , Badajoz, Spain.

DOI:

https://doi.org/10.4067/s0718-2724202600025079

Keywords:

Innovation, SME, Firm capabilities, Covid-19, Longitudinal analysis

Abstract

Understanding the determinants of firm-level innovation is essential for explaining how SMEs sustain competitiveness and adapt to changing economic conditions. This study examines the drivers of innovation in SMEs located in Extremadura, a peripheral Spanish region classified as a European convergence region. Using a unique series of consecutive annual surveys covering the period 2017–2022, the analysis investigates both the determinants of innovation and their stability before and after the COVID-19 pandemic.
The empirical analysis employs logistic regression models with year fixed effects and predicted probability estimates to assess the relationship between firm characteristics, organizational practices, and innovation. The results confirm the importance of structural resources and outward orientation. Firm size and exporting activity emerge as the strongest and most consistent predictors of innovation, while process automation is positively associated with innovation outcomes. Environmental scanning exhibits a negative relationship with innovation, suggesting that intensive external monitoring does not necessarily translate into innovative activity. Organizational variables show limited direct effects once structural and operational factors are taken into account.
To assess temporal stability, interaction effects between key firm practices and the post-COVID period are estimated. The results indicate that these interaction effects are not statistically significant, suggesting that the principal determinants of innovation remained broadly stable despite the disruption generated by the pandemic.
The study contributes to the innovation literature by providing rare longitudinal evidence from a peripheral European region and by demonstrating the persistence of established innovation drivers under conditions of major economic uncertainty. The findings also highlight the importance of place-based policies that support exporting activity, process upgrading, and capability development as mechanisms for sustaining innovation in less-developed regional contexts.

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