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Jan 23, 2024
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Abstract
This study aims to learn the impact of human capital, social capital, and financial constraints on frugal innovation as perceived by family businesses in the Philippines. Quantitative research was performed using data collected from 93 family businesses, which were analyzed using simple linear regression and structural equation modeling. The results showed that human capital, social capital, and financial constraints, individually and collectively, have a significant impact on frugal innovation. The results also indicated that all measures used for human capital and financial constraints are acceptable, while some measures of social capital and frugal innovation were deemed unfit and were removed from the model. The academe should expand or improve its discussion and curriculum on frugal innovation and continue to look at this through the lenses of its theoretical and practical aspects. Moreover, professors and students should study the relationship further and ultimately expand knowledge and understanding. Family businesses should prioritize improving their human capital to enhance their frugal innovation capabilities. Implementing efficient financial procedures, investigating alternative funding sources, and actively seeking external finance opportunities are crucial. Moreover, family businesses should develop robust social networks. Lastly, the Philippine government should actively encourage continuous learning through mentorship programs and networks.
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
Alumno, T. A. D., Azurin, R. G. T., Dumayas, J. R. I., Tan, S. G., Tanpoco, M. R., & Caminong, J. M. (2024). Thriving in Constraints: Exploring the Interplay of Human Capital, Social Capital, and Financial Constraints in Frugal Innovation within Family Businesses. International Journal of Multidisciplinary: Applied Business and Education Research, 5(1), 118-129. https://doi.org/10.11594/ijmaber.05.01.12
References
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Danquah, M., & Amankwah-Amoah, J. (2017). Assessing the relationships between hu-man capital, innovation and technology adoption: Evidence from sub-Saharan Af-rica. Technological Forecasting & Social Change, 122, 24-33. http://dx.doi.org/10.1016/j.techfore.2017.04.021
Dawson, A. (2012). Human capital in family businesses: Focusing on the individual
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De Massis, A., Audretsch, D., Uhlaner, L., & Kammerlander, N. (2017). Innovation with limited resources: Management les-sons from the German Mittelstand. Jour-nal of Product Innovation Management, 35, 125-146. https://doi.org/10.1111/jpim.12373
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Hair, J. F., Black, W. C., Balin, B. J., & Anderson, R. E. (2010). Multivariate data analysis. Maxwell Macmillan International Edi-tions.
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Hooper, D., Coughlan, J., & Mullen, M. (2008). Structural equation modeling: Guidelines for determining model fit. Electronic Journal of Business Research Methods, 6(1), 53-60.
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Olexova, V., & Gogolova, M. (2021). Innovation and its importance in the context of a company’s marketing strategy. EDP Sci-ences. https://doi.org/10.1051/shsconf/20219101021
Pucci, T., Brumana, M., Minola, T., & Zanni, L. (2017). Social capital and innovation in a life science cluster: The role of proximity and family involvement. The Journal of Technology Transfer, 45(1), 205–227. https://doi.org/10.1007/s10961-017-9591-y
Rosetto, D., Borini, F., Bernardes, R., & Frank-wick, G. (2023). Measuring frugal innova-tion capabilities: An initial scale proposi-tion. Technovation, 121. https://doi.org/10.1016/j.technovation.2022.102674
Sanchez-Famoso, V., Pittino, D., Chirico, F., Maseda, A., & Iturralde, T. (2019). Social capital and innovation in family firms: The moderating roles of family control and generational involvement. Scandina-vian Journal of Management, 35(3), 101043. https://doi.org/10.1016/j.scaman.2019.02.002
Shaikh, S., & Khoso, I. (2019). Impact of finan-cial constraints on the performance of SMEs - A study of Sindh province. Journal of Independent Studies and Research - Management and Social Sciences & Eco-nomics, 17(1). https://doi.org/10.31384/jisrmsse/2019.17.1.6
Sica, E. (2018). Firms, finance and sustainable transitions: the financial constraints of eco-innovation companies. Edward Elgar Publishing
Sun, X., Li, H., & Ghosal, V. (2020). Firm-level human capital and innovation: Evidence from China. China Economic Review. https://doi.org/10.1016/j.chieco.2019.101388
Thrassou, A., Vrontis, D., & Bresciani, S. (2018). The agile innovation pendulum: Family business innovation and the hu-man, social, and marketing capital. Inter-national Studies of Management & Organ-ization. 48(1), 88-104. https://doi.org/10.1080/00208825.2018.1407086
Trachuk, A. V., & Linder, N. V. (2021). The im-pact of financial capital on innovative be-havior of industrial companies. Finance: Theory and Practice, 25(1), 51–69. https://doi.org/10.26794/2587-5671-2021-25-1-51-69
Bhandari, H. & Yasunobu, K. (2009). What is social capital? A comprehensive review of the concept. Asian Journal of Social Science. 37(3), 480-510. https://doi.org/10.1163/156853109X436847
Dagan, J. G., Rafi, M. R., Sia, Y., & Dilla, S. (2021). How business innovation affects a company to improve the organization, Entrepreneurship, and business model. https://doi.org/10.2991/aebmr.k.211207.015
Danquah, M., & Amankwah-Amoah, J. (2017). Assessing the relationships between hu-man capital, innovation and technology adoption: Evidence from sub-Saharan Af-rica. Technological Forecasting & Social Change, 122, 24-33. http://dx.doi.org/10.1016/j.techfore.2017.04.021
Dawson, A. (2012). Human capital in family businesses: Focusing on the individual
level. Journal of Family Business Strategy, 3(1), 3-11. https://doi.org/10.1016/j.jfbs.2011.12.001
De Massis, A., Audretsch, D., Uhlaner, L., & Kammerlander, N. (2017). Innovation with limited resources: Management les-sons from the German Mittelstand. Jour-nal of Product Innovation Management, 35, 125-146. https://doi.org/10.1111/jpim.12373
Duran, P., Kammerlander, N., Essen, M.V., & Zellweger, T. (2015). Doing more with less: Innovation input and output in fami-ly firms. Academy of Management Jour-nal, 59(4). https://doi.org/10.5465/amj.2014.0424
Felicio, J., Couto, E., & Caiado, J. (2012). Hu-man capital and social capital in entre-preneurs and managers of small and me-dium enterprises. Journal of Business Economics and Management. 13(3), 395-420. https://doi.org/10.3846/16111699.2011.620139
George, D., & Mallery, P. (2003). SPSS for Win-dows step by step: A simple guide and ref-erence 11.0 update (4th ed.). Boston: Al-lyn & Bacon
Gu, Q., Wang, G. G., & Wang, L. (2013). Social capital and innovation in R&D teams: The mediating roles of psychological safety and learning from mistakes. R&D Man-agement, 43(2), 89–102. https://doi.org/10.1111/radm.12002
Hair, J. F., Black, W. C., Balin, B. J., & Anderson, R. E. (2010). Multivariate data analysis. Maxwell Macmillan International Edi-tions.
Heider, A., Hülsbeck, M., & Schlenk-Barnsdorf, L. (2022). The role of family firm specific resources in innovation: an integrative literature review and framework. Man-agement Review Quarterly, 72, 483-530. https://doi.org/10.1007/s11301-021-00256-3
Hooper, D., Coughlan, J., & Mullen, M. (2008). Structural equation modeling: Guidelines for determining model fit. Electronic Journal of Business Research Methods, 6(1), 53-60.
Hossain, M., Simula, H., & Halme, M. (2016). Can frugal go global? Diffusion patterns of frugal innovations. Technology in Soci-ety, 46, 132-139. https://doi.org/10.1016/j.techsoc.2016.04.005
Jayabalan, J., Dorasamy, M., Raman, M., Sam-basivan, M., & Harun, S. (2022). Unleash-ing frugal innovation in private higher education institutions via intellectual cap-ital and information technology capabil-ity: A systematic literature review. F1000Research, 10, 1109. https://doi.org/10.12688/f1000research.73329.2
Kidwell, R., Fuentes-Lombardo, G., Sanchez-Famoso, V., Cano-Rubio, M., & Kloepfer, KE. (2019). Human capital in the interna-tionalization of family firms. Thunderbird International Business Review (62), 353– 369. https://doi.org/10.1002/tie.22107
Kline, R. B. (2015). Principles and practice of structural equation modeling. Guilford Publications.
Lei, H., Gui, L., & Le, P.B. (2021). Linking trans-formational leadership and frugal innova-tion: The mediating role of tacit and ex-plicit knowledge sharing. Journal of Knowledge Management. https://doi.org/10.1108/JKM-04-2020-0247
Lopez-Sanchez, J., & Santos-Vijande, M. (2022). Key capabilities for frugal innovation in developed economies: Insights into the current transition towards sustainability. Sustainability Science, 17, 191-207. https://doi.org/10.1007/s11625-021-01071-1
Matzler, K., Veider, V., Hautz, J., & Stadler, C. (2014). The impact of family ownership, management, and governance on innova-tion. Journal of Product Innovation Man-agement, 32(3), 319–333. https://doi-org.dlsu.idm.oclc.org/10.1111/jpim.12202
Mengesha, G. H., Watson, R. T., & Negash, S. (2021). Frugal knowledge sharing for frugal innovation diffusion in Africa: The church woman and related models. Jour-nal of Global Information Management (JGIM), 29(6), 1-23. https://doi.org/10.4018/JGIM.289221
Miller, D., & Le Breton-Miller, I., (2021). Man-aging for the long run: Lessons in compet-itive advantage from great family busi-nesses. https://doi.org/10.1111/j.1741-6248.2005.00046_1.x
Olexova, V., & Gogolova, M. (2021). Innovation and its importance in the context of a company’s marketing strategy. EDP Sci-ences. https://doi.org/10.1051/shsconf/20219101021
Pucci, T., Brumana, M., Minola, T., & Zanni, L. (2017). Social capital and innovation in a life science cluster: The role of proximity and family involvement. The Journal of Technology Transfer, 45(1), 205–227. https://doi.org/10.1007/s10961-017-9591-y
Rosetto, D., Borini, F., Bernardes, R., & Frank-wick, G. (2023). Measuring frugal innova-tion capabilities: An initial scale proposi-tion. Technovation, 121. https://doi.org/10.1016/j.technovation.2022.102674
Sanchez-Famoso, V., Pittino, D., Chirico, F., Maseda, A., & Iturralde, T. (2019). Social capital and innovation in family firms: The moderating roles of family control and generational involvement. Scandina-vian Journal of Management, 35(3), 101043. https://doi.org/10.1016/j.scaman.2019.02.002
Shaikh, S., & Khoso, I. (2019). Impact of finan-cial constraints on the performance of SMEs - A study of Sindh province. Journal of Independent Studies and Research - Management and Social Sciences & Eco-nomics, 17(1). https://doi.org/10.31384/jisrmsse/2019.17.1.6
Sica, E. (2018). Firms, finance and sustainable transitions: the financial constraints of eco-innovation companies. Edward Elgar Publishing
Sun, X., Li, H., & Ghosal, V. (2020). Firm-level human capital and innovation: Evidence from China. China Economic Review. https://doi.org/10.1016/j.chieco.2019.101388
Thrassou, A., Vrontis, D., & Bresciani, S. (2018). The agile innovation pendulum: Family business innovation and the hu-man, social, and marketing capital. Inter-national Studies of Management & Organ-ization. 48(1), 88-104. https://doi.org/10.1080/00208825.2018.1407086
Trachuk, A. V., & Linder, N. V. (2021). The im-pact of financial capital on innovative be-havior of industrial companies. Finance: Theory and Practice, 25(1), 51–69. https://doi.org/10.26794/2587-5671-2021-25-1-51-69