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October 18, 2025Journal of Knowledge Management

Examining the interdependent role of digitalization and external search breadth in driving service innovation in SMEs

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Authors

SRSimon O. RabyMount Royal UniversityLALorenzo ArditoPolytechnic University of Bari

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Implication

Quantitative analysis shows an inverted U-shaped relationship between digitalization and service innovation in SMEs, suggesting external search breadth moderates this effect.

Key Points

  • Digitalization enhances service innovation performance in SMEs, but with diminishing returns when over-applied without external knowledge sourcing.
  • An inverted U-shaped relationship is confirmed between digitalization and service innovation, changing to a U-shape with high external search breadth.
  • The study utilizes probit regression models to analyze survey data from 489 Canadian SMEs, emphasizing the importance of balancing digitalization and external search breadth.
  • Findings suggest SME managers should strategically invest in digitalization while seeking external knowledge to optimize innovation outcomes.

Cite This Study

Raby et al. (2025) studied this question.

synapsesocial.com/papers/68f3eb011cfc5ad53f290786https://doi.org/10.1108/jkm-03-2025-0280
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