INNOVATION AND KNOWLEDGE SHARING OF SME IN AN EMERGING ECONOMY; THE MODERATING EFFECT OF TRANSFORMATIONAL LEADERSHIP STYLE

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Abstract
Enriching the literature on innovation and knowledge management, this paper examines the impact of various types of innovation (product, process, marketing, and organization) on the knowledge sharing of SMEs through transformational leadership. A total of 437 samples were collected from SMEs owners/managers in the service sector of a developing economy through a quantitative method. The data were analyzed using a SMART PLS-SEM. The findings confirmed the hypotheses that innovation have a significant influence on knowledge sharing; whiles as transformational leadership had a non-moderating effect. Besides consolidating the existing theory on the importance of innovation for explaining a variation in knowledge sharing activities, the findings also inform SMEs and policymakers to be cautious of implementing transformational leadership style as it may have a non-moderating impact in today’s entrepreneurial activities. Finally, we believe that this study will provide researchers with some key aspects to explore in this area of study and encourage applications of objective and subjective measures to improve the validity of results.

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