RELATIONSHIP BETWEEN INNOVATION AND PERFORMANCE: IMPACT OF COMPETITIVE INTENSITY AND ORGANIZATIONAL SLACK

ABSTRACT Innovation is a key factor in organizational performance. Although there are references from strategic theory to understand the relationships between these two variables, there are still many gaps that need to be filled. Thus, more empirical validation is necessary. This study aimed to verify how the relationship between innovation and performance is affected by the presence of precursor variables such as competitive intensity and organizational slack. This study involved conducting explanatory and cross-sectional investigations by applying structural equation modeling to a sample of small and medium-sized enterprises in Bogotá, Colombia. The results make a relevant contribution to the literature on strategic management by showing that competitive intensity and organizational slack induce innovation and positively impact performance.