Effects Of Innovation on Entrepreneurial Performance among SMES in Malawi: Evidence from Selected Telecommunication Industries
DOI:
https://doi.org/10.59413/ajocs/v7.i2.33Keywords:
Innovation, SMEs, Performance, Telecommunications IndustryAbstract
Innovation remains critical for SME competitive viability in developing countries, yet empirical evidence on innovation effects within resources-constrained African telecommunications remains limited. This study examined innovation effects on entrepreneurial performance among Malawi's telecommunication SMEs. This study was guided by three objectives, which were to assess innovation effects on entrepreneurial performance and examine challenges affecting innovation implementation. The research employed a convergent parallel mixed-methods design combining quantitative and qualitative approaches. Data were collected from 121 survey respondents and 10 interview participants operating in Lilongwe and Blantyre during November-December 2025. Quantitative analysis employed descriptive statistics, Pearson correlation, hierarchical multiple regression with comprehensive assumptions testing, Baron and Kenny moderation analysis, and Bonferroni-adjusted hypothesis testing. Qualitative analysis followed Braun and Clarke's thematic framework. Findings were integrated around five themes: conceptualizing innovation in SMEs, innovation practices in the telecommunication industry, entrepreneurial performance, and challenges affecting innovation implementation. Results revealed comprehensive innovation adoption across product, process, marketing, and organizational dimensions (M = 3.61 - 3.72) through bundled strategies. Performance proved moderate (M = 3.55) with customer satisfaction as the strongest dimension. Innovation demonstrated significant positive effects on performance (r = .400, B = .520, p = .001), explaining 16% variance beyond control variables. Implementation challenges registered moderate-high severity (M = 5.15 - 5.32) but not moderate innovation effectiveness (B = -.042, p = .502), operating as adoption barriers rather than effectiveness moderators. This study concludes that telecommunications SMEs posses genuine innovation capability, generating measurable performance benefits despite severe implementation challenges. Recommendations target financial instrument innovation and regulatory differentiation. skills, pipeline expansion, infrastructure prioritization, and evidence-based innovation promotion emphasizing realistic incremental benefits. Findings advance Schumpeterian theory by documenting necessity-driven innovation logic and contribute practical guidance for innovation ecosystem development in resource-constrained contexts.
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