Analytical Model of the Impact of Internationalization on Innovation Performance, with the Mediating Role of Market Orientation and Entrepreneurial Orientation in SMEs in Isfahan Province

Document Type : Original Article

Authors

1 Associate Professor, Department of Business Administration, Faculty of Economics and Management, University of Tabriz, Tabriz, IRAN

2 Associate Professor, department of Management, Payame Noor University (PNU), Tehran, Iran

3 Master's Graduate، Department of Management, Payam Noor University, ،Tehran, Iran

Abstract

This study investigates the impact of internationalization on innovation performance through the mediating roles of market orientation and entrepreneurial orientation in small and medium-sized enterprises (SMEs) in Isfahan Province, Iran. The research is applied in purpose and descriptive-survey in nature. The statistical population comprised 80 SME units in Isfahan Province, with a sample of 66 managers selected through purposive sampling based on Cochran's formula. Data analysis was conducted using SEM-PLS to simultaneously examine relationships between variables and validate the proposed model. Findings revealed that while the degree of internationalization had no direct significant effect on innovation performance (t=1.26, β=0.869), this relationship was confirmed through two indirect pathways with full mediation by market orientation (t=2.88, β=0.846) and entrepreneurial orientation (t=2.24, β=0.686). Furthermore, market orientation (β=0.933) and entrepreneurial orientation (β=0.886) had direct positive and significant effects on innovation performance. The R² value for innovation performance was 0.89, indicating strong model fit. Results demonstrate that in Isfahan Province SMEs, internationalization alone cannot enhance innovation; rather, such impact requires strengthening market-oriented culture (customer orientation, competitor orientation, and inter-functional coordination) and entrepreneurial spirit (risk-taking, proactiveness, and competitive aggressiveness) within organizations. The findings, contextualized within Iran's specific economic conditions—sanctions, currency fluctuations, and limited access to target markets—provide valuable guidance for managers and policymakers seeking to improve innovation performance through international activities.

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