Explore how SME family businesses of travel service industry use market knowledge for product innovation*

Based on theoretical lens including input-process-output, knowledge-based view, and resource dependence theory, this study proposes that the relationship between market knowledge (MK) and product innovation may be mediated by operational effectiveness, knowledge governance capability, and modularity production. With travel retailers as the data analysis unit, 261 cases were collected in two waves from the travel supply chain in Taiwan. This study adopts two-step approach of confirmatory factor analysis and structural equation modeling method to investigate the relationship among different constructs. Based on the path analysis results of the theoretical model, five of six paths were confirmed and operational effectiveness, knowledge governance capability, and modularity production were all positively affected by MK; two of them mediated the positive relationship between MK and product innovations, except for knowledge governance capability. This study echoes recent call for the possible factors as the key mediators on MK and innovation relationship in SME-FBs context.

Automated summary

Based on theoretical frameworks including input-process-output, knowledge-based view, and resource dependence theory, this study examines the mediating role of operational effectiveness, knowledge governance capability, and modularity production in the relationship between market knowledge (MK) and product innovation. Data from 261 travel retailers in Taiwan were analyzed using confirmatory factor analysis and structural equation modeling. The findings confirm that MK positively affects operational effectiveness, knowledge governance capability, and modularity production. Moreover, operational effectiveness and modularity production mediate the relationship between MK and product innovation, while knowledge governance capability does not. This study contributes to the understanding of potential mediators in the MK-innovation relationship in the context of SME-FBs.