Determinants of innovation capability: the roles of transformational leadership, knowledge sharing and perceived organizational support

Abstract

Purpose: The study aims to explore the differences in transformational leadership’s (TL’s) influences on each aspect of innovation capability, namely, product innovation and process innovation. It also deepens understanding of the pathways and conditions to improve specific aspects of innovation capability by assessing the mediating role of knowledge sharing (KS) and moderating mechanism of perceived organizational support (POS). Design/methodology/approach: The paper utilized structural equation modeling and cross-sectional design to test hypotheses in the proposed research model based on using data collected from 394 participants at 88 Chinese firms. Findings: The findings indicate that KS mediates TL’s effects on innovation capabilities. In addition, the influences of TL and KS on specific aspects of innovation capability are different and depend on the extent of employees’ POS. Research limitations/implications: Future studies should test mediating roles of knowledge management’s constituents and/or investigate the moderating roles of firm ownership form to increase the understanding of potential factors or key conditions that may have significant influences on a firm’s innovation capability. Practical implications: The paper significantly contributes to increasing the understanding of the link between TL and specific aspects of innovation capability by highlighting the important role of stimulating KS and enhancing POS. Originality/value: The paper provides useful information and valuable initiatives to increase leadership outcomes and firm’s capability for innovation.