Abstract:
Considering the significance of frugal innovation for Small and Medium Enterprises (SMEs) in
emerging economies, the present research seeks to investigate how knowledge integration drives
frugal innovation. The study also sheds light on the mechanisms for promoting varying forms
of innovation ability by examining the moderating effect of perceived organizational support.
The present research adopted a quantitative methodology. The population of the study consists
of SMEs’ employees in Sri Lanka, and the sample was selected using a convenience sampling
technique. Self-administered questionnaires were used to collect data from 248 Sri Lankan
SMEs’ employees. The data were analysed for assessment of the measurement and structural
models via a multi-group structural equation approach to assess hypotheses established in the
study. The study found a significant impact of knowledge integration on various dimensions
of frugal innovation, such as Frugal Cost (FC), Frugal Functionality (FF), and Frugal Ecosystem
(FE). Further, the study reports the moderating effect of perceived organisational support
on the association between knowledge integration and the frugal functionality, frugal cost, and
frugal ecosystem dimensions of frugal innovation. The findings emphasise the important role of
knowledge integration in enabling frugal innovation for SMEs’ managers and in developing an
organisational climate where employee contributions are valued. Hence, this study investigates
the underexplored interplay between knowledge integration and frugal innovation by investigating
the moderating role of perceived organisational support in this relationship through the
lenses of the knowledge-based view in a resource-constrained environment.
