Print Email Facebook Twitter Business model innovation and firm performance Title Business model innovation and firm performance: Exploring causal mechanisms in SMEs Author Latifi Rostami, S.M.A. (TU Delft Information and Communication Technology) Nikou, Shahrokh (Åbo Akademi University; Stockholm University) Bouwman, W.A.G.A. (TU Delft Information and Communication Technology) Date 2021 Abstract Although research has shown that business model innovation (BMI) can create a firm's competitive advantage and enhance its performance, many small and medium-sized enterprises (SMEs) fail to obtain the expected outcomes when innovating their business model. Business Model Innovation (BMI) leads to irreversible fundamental changes in key components of a company's business model, which means it carries with it a high level of risk, ambiguity and uncertainty. Drawing on the data from a cross-industry sample of 563 European SMEs, we apply structural equation modelling to examine how a firm's performance is affected by innovating its business model. A conceptual model is developed to examine how organisational capabilities and implementation of a profit- or growth-oriented strategy, as materialised in BMI, affect a firm's overall performance. The results indicate that, while the direct link between BMI and firm performance is not significant, this path is fully mediated through efficiency growth, organisational capabilities and revenue growth. Furthermore, there are significant direct effects from efficiency growth, organisational capabilities and revenue growth on firm performance. These findings confirm the validity of the model and contribute to existing literature on BMI efforts in SMEs and provide guidelines to help company owners/managers implement informed decisions about the implementation of BMI based on their firm's strategies. Subject Business model innovationFirm performanceFirm strategyOrganisational capabilitiesSME To reference this document use: http://resolver.tudelft.nl/uuid:cd26fecd-2ef3-4b9c-a122-dda50ecdc1ef DOI https://doi.org/10.1016/j.technovation.2021.102274 ISSN 0166-4972 Source Technovation, 107 Part of collection Institutional Repository Document type journal article Rights © 2021 S.M.A. Latifi Rostami, Shahrokh Nikou, W.A.G.A. Bouwman Files PDF 1_s2.0_S0166497221000559_main.pdf 1.6 MB Close viewer /islandora/object/uuid:cd26fecd-2ef3-4b9c-a122-dda50ecdc1ef/datastream/OBJ/view