The effect of innovation and leadership on performance in China and Vietnam

To be competitive, firms have focused their resources on innovation. The success of innovation, however, depends on several factors. One of these factors is the capacity and ability of firms’ leaders. This study aimed to examine the relationship between leadership, innovation and organizational performance in two socialist countries, China and Vietnam. Four hypotheses were proposed to test the direct and indirect relationships. 334 SMEs responded to the survey that revealed that SMEs leaders who practised behaviours that associated with design leadership fostered firms’ ability to be innovative and in turn, affected the organizational performance outcomes. Discussion and implication are also provided.