Effects of entrepreneurial innovativeness on firm performance

Strategic and entrepreneurship literatures suggest that innovation improves firm performance, but empirical results are mixed. In this article we investigate the effect of components of innovation by small businesses on firm performance, and test the study hypotheses using AMOS 18 statistical package. We find that the three relevant innovation dimensions (process, market and supply chain) are significantly correlated among one another and each with firm performance. However, we find that the control variables of firm size and entrepreneur’s gender and educational qualifications, have no significant relationship with firm performance, even when positive. This study has lent a contextual voice to the body of knowledge relating to innovation and firm performance in entrepreneurship literature. Implications of the study for policy and scholarly research are discussed.