Examining the Nexus between Knowledge Management Processes and Firm Sustainability: The Mediating Role of Innovation among SMEs in Ghana
DOI:
https://doi.org/10.63385/jemm.v1i3.225Keywords:
Knowledge Management Process, Innovation, Firm Sustainability, Dynamic Capability, SMEsAbstract
This study examines how knowledge management processes (KMP) enhance firm sustainability (FS) via the mediating role of innovation (INV) among small and medium-sized enterprises (SMEs) in Ghana. A cross-sectional survey using quantitative data gathered information from 360 employees across ten SMEs in Ghana that were implementing knowledge management practices. Using Structural Equation Modeling (SEM) in SmartPLS 4, the study revealed that KMP significantly predicts both innovation (β = 0.777, p < 0.001) and firm sustainability (β = 0.568, p < 0.001). In contrast, innovation exerts a direct positive effect on sustainability (β = 0.329, p < 0.001). Moreover, innovation partially mediates the KMP–FS relationship (indirect effect β = 0.255, p < 0.001), indicating that firms achieve stronger sustainability outcomes when knowledge is strategically converted into innovative practices. Theoretically, the study integrates the Resource-Based View (RBV) and Dynamic Capabilities View (DCV), advancing the understanding of how intangible knowledge resources translate into sustainable performance through innovation. Practically, the results provide actionable guidance for managers and policymakers: SMEs should invest in digital knowledge systems, promote knowledge-sharing cultures, and align innovation initiatives with sustainability objectives. This study contributes to the limited empirical evidence from emerging economies by positioning innovation as the dynamic capability that transforms knowledge assets into a sustainable competitive advantage.
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