The Influence of Entrepreneurial Orientation on Types of Process Innovation Capabilities and Moderating Role of Social Capital

Innovation either in products or processes requires innovation capability. Such ability, as a result, facilitates firms to succeed and gain competitive advantage in the industry by improving their efficiency of creating and marketing products and/or services. In this context, current research examines how risk-taking and proactivity dimensions of entrepreneurial orientation influence types of process innovative capabilities; and to what extent this relationship is strengthened/weakened by social capital. Authors collected data from chemical manufacturing firms of Pakistan, and carefully analyzed it with multiple regression technique. The findings revealed that proactivity and risk-taking facilitate incremental and radical process innovation. The moderation of social capital further strengthened the impact proactivity had on radical process innovation. However, moderation of social capital did not strengthen the impact risk-taking had on incremental and radical process innovation. Surprisingly, social capital demonstrated significantly positive impact on radical process innovation. The paper also discusses the theoretical and managerial implications.