Market Orientation and Sources of Knowledge to Innovate in SMEs: A Firm Level Study

Abstract

This work examines the relationship between the three market orientation (MO) components, i.e. customer orientation, competitor orientation and inter-functional coordination, and the extension to which small and medium-sized enterprises (SMEs) use different sources of knowledge to innovate. Based on a sample of 181 Chilean SMEs, a confirmatory factorial analysis (CFA) was performed to analyze the relationship among constructs. The results show that the extension to which SMEs use different sources of knowledge to innovate depends on the interactions between MO components. This study addresses a gap in the literature, by linking and interrelating market orientation components to the innovation perspective in SMEs. Therefore, we provide insights into the role of each MO component in influencing the extension to which firms seek for and use different sources of knowledge to innovate and attempt to explain some literature inconsistencies on the theme.