Interrelated effects of technological and non-technological innovation on firm performance in EM – A mediation analysis of Peruvian manufacturing firms

Purpose: Firm innovative performance in emerging markets must take into account the peculiarities of their competitive environment. Research on the effect of innovation on firm performance focuses mainly on high-tech firms in developed countries. This study proposes a model that empirically examines how technological and non-technological innovation influence Peruvian manufacturing firms' performance. Design/methodology/approach: Using the resource-based view, a model is proposed that allows the mediation effects of technological innovation and non-technological innovation on firm performance among low and medium-low technological intensity manufacturing firms to be analyzed. The study uses structural equation modeling and mediation analysis with data from 503 Peruvian firms researched in the 2012 National Survey of Innovation. Findings: The model's validation shows that the integrated perspective is relevant for emerging markets like Peru. Moreover, the results confirm that technological and non-technological innovation and their interrelationship are important for understanding the performance dimensions of Peruvian manufacturing firms. Originality/value: This paper contributes to the literature on innovation in Latin American economies, proposing and validating a model that combines the mediation effects of technological and non-technological innovation to explain the relevant dimensions of firm performance in emerging markets.