Benefits of cross-border collaboration at Base of the Pyramid markets for innovation improvement

Abstract

One of the greatest challenges for international buyers at the Base of the Pyramid (BOP) markets is achieving social performance and innovation performance improvements in production processes in export manufacturing firms. In recent years, collaboration with companies from BOP markets has become a source of innovation for companies that do business in developing countries. By collaborating in BOP markets, firms can meet their market growth objectives while simultaneously stimulating social sustainability development. Utilising the partial least squares structural equation modelling (PLS-SEM), we test multiple hypotheses against the data of 239 companies operating in BOP markets in Pakistan. Our results reveal the importance of collaboration in explaining social performance outcomes. This study attempts to offer insights into the effect of collaboration on innovation performance improvements. In particular, it contributes to achieving Sustainable Development Goal 9, in particular focusing on the development of technology infrastructure, to enhance research for promoting innovation. Our findings suggest that collaboration influences can significantly affect the improvements in product and process innovation. Future research could be undertaken by using either quantitative research or survey-based research in BOP markets. Based on the findings, we discuss research and practical implications for the practitioners as well as for policy makers.