When and how does creativity influence performance? An examination of SMEs in an emerging economy

Abstract

Underpinned by the resource-based view and social capital theories, this study examines the mediating role of innovation in the relationship between creativity and the performance of SMEs in an emerging economy. We propose additionally that the innovation created through the transformation of creative ideas influences performance within the boundary conditions of social network ties. We collected our data from two hundred and fifty (250) SMEs in Ghana using questionnaires and analyzed the data using Structural Equation Model in LISREL 8.50 and PROCESS in SPSS version 23. Our results show that there is a positive relationship between creativity and performance. The study further reveals that product innovation mediates the relationship between creativity and firm performance. Although we did not find enough evidence to support the notion that social network ties moderate the indirect effect of creativity on performance, through process innovation, the results suggest that the conditional indirect effect of creativity on performance through product innovation is positive and stronger at high levels of social network ties. The implications of these results are discussed.