Innovation and productivity in tourism small and medium enterprises: A longitudinal study

• Published in: Tourism management perspectives Vol. 38; p. 100804
• Main Authors: Nguyen, Van K., Natoli, Riccardo, Divisekera, Sarath
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.04.2021
• Subjects: Firm productivity; Longitudinal studies; Marketing innovation; Technological innovation; Tourism SMEs; Technological innovation; Tourism SMEs; Marketing innovation; Longitudinal studies; Firm productivity
• ISSN: 2211-9736; 2211-9744
• DOI: 10.1016/j.tmp.2021.100804

This paper examines the factors influencing innovation and the relationship between innovation and productivity among Australian tourism small and medium enterprises (SMEs). Unlike most past studies relying on cross-sectional data, this study employs longitudinal innovation data of 400 tourism SMEs over five years. A two-stage random-effects probit model is used to account for unobserved firm heterogeneity. The results show that innovation inputs, firm characteristics, and external environment significantly affect innovation in general with competition and demand uncertainty being the distinct drivers of marketing innovation. The study reveals a significant and positive effect of technological and marketing innovation on tourism SMEs' productivity. Findings inform policy discussions to improve the current low levels of productivity in the tourism industry. •Examines innovation and productivity in tourism SMEs based on a longitudinal database and a two-stage random-effects probit model.•Training, collaboration, ICT and finance positively affect both innovation types.•Competition and demand uncertainty affect marketing innovation.•Technological and marketing innovations increase tourism productivity.