Product innovation and SME export intensity: The moderating role of government support business environment and quality certification

Abstract

Existing literature identifies product innovation as the most prevalent innovation type in small and medium enterprise (SME) export activities, yet its relationship with export performance remains inconclusive. Building on institutional theory, this paper examines how formal institutional factors influence this relationship. Using data from 1027 Indian SMEs in the World Bank's 2022 Enterprise Survey and employing Ordinary Least Squares, our findings reveal that government support, the domestic business environment and quality certification positively moderate the relationship between product innovation and export performance, with quality certification exerting the most substantial positive moderating effect. These insights have significant implications for entrepreneurs and policymakers seeking to foster SME internationalisation. It offers new theoretical directions on product innovation and provides more understanding of the role of formal institutional factors in global markets.