TITLE:
The Age-Resource Dynamic and Product Innovation Performance
AUTHORS:
Lily Julienti Abu Bakar
KEYWORDS:
Small Medium Enterprise, Tangible Resources, Product Innovation Performance, Innovation, SME’s Age
JOURNAL NAME:
Open Journal of Business and Management,
Vol.13 No.5,
September
24,
2025
ABSTRACT: This study focuses on small and medium enterprises (SMEs) in Malaysia’s manufacturing and agro-based sectors, which are particularly vulnerable to resource constraints and environmental uncertainties. SMEs were selected based on their classification by SME Corporation Malaysia, which defines them as enterprises with fewer than 150 employees. The sampling frame was derived from SME Corporation Malaysia’s online directory, ensuring accuracy and representativeness. A probability sampling approach, specifically proportionate stratified random sampling, was employed to select 362 manufacturing SMEs across Malaysia’s 14 states. This study examines the role of tangible resources in predicting product innovation performance (PIP) in SMEs and the moderating effect of SME’s age. Findings indicate that tangible resources are often less critical for innovation success in SMEs due to their dynamic and flexible operational environments. Unlike larger firms, SMEs rely more on intangible assets such as knowledge, skills, and organizational culture to drive innovation. Resource constraints further push SMEs to develop innovation strategies centred on human capital and technological expertise rather than physical and financial assets. However, firm age moderates this relationship, with older SMEs demonstrating a stronger capacity to leverage tangible resources for innovation. More mature firms benefit from established routines, financial stability, and deeper market insights, enhancing their ability to convert tangible resources into innovative outputs. In contrast, younger SMEs face challenges in optimizing tangible assets due to limited experience and funding. The originality of this study underscores the importance of dynamic capabilities and strategic resource utilization in fostering innovation within SMEs. Findings from this study contributed to a better understanding of SME dynamics and resource challenges in Malaysia’s manufacturing and agro-based sectors.