Innovation under regulatory, financial and market obstacles: evidence from the Tanzanian food industry

Purpose This study examines the relationships between regulatory, financial and market obstacles and firms’ innovation performance in the food industry of a developing country. Design/methodology/approach The study is based on survey data obtained from 229 small and medium-sized enterprises (SMEs) operating in the Tanzanian food industry. Data were collected using a structured questionnaire with Likert-scale items designed to measure innovation obstacles and firm innovation performance. Partial least squares structural equation modelling was employed to analyse the hypothesised relationships. Findings The results indicate a positive association between regulatory obstacles and financial and market obstacles and a negative relationship with firm innovation performance. Further results reveal that financial obstacles are negatively associated with innovation performance, whereas market obstacles have a positive relationship with innovation performance. Overall, this study reinforces the view that innovation obstacles can both hinder and stimulate firms’ innovation performance. Research limitations/implications This study collected data from the Tanzanian food industry only. Hence, the generalisability of the findings is not guaranteed, considering that the degree of perceptions and impact of obstacles to innovation varies with contexts. Originality/value This study contributes to the existing literature by taking a different approach and exploring the relationship between regulatory obstacles and other innovation obstacles, in addition to being a direct inhibitor of firm innovation performance.