Business innovation in emerging markets – analysing innovative enterprises using the PLS-SEM and NCA methods

The study entails an examination of the factors needed for the emergence of business innovation, in the context of a developing economy, based on representative data from the Global Entrepreneurship Monitor 2021. Drawing on the theories in the literature, the impact mechanism of the entrepreneurial innovation development in our model has been assumed to involve a three-sided impact. The study builds on the entrepreneurial side effects, based on the classical Schumpeterian theory as well as incorporating the enterprises’ productive-side effects into the model, defining the model as resultant from socioeconomic macrocontext effects. The analysis of our model has been tested and analyzed using partial least squares - structural equation modeling and the necessary condition analysis. Our results show that business innovation requires not one factor, but a combination of factors. The system needs visionary entrepreneurs, who can stimulate innovation, along the concept of sustainability. An economically prosperous business with international connections which views challenges as opportunities, however, also constitutes an important factor providing proper framework for new products and services. Adequacy of the socio-economic macro-context is essential as well, as it too contributes to the development of entrepreneurship and thus to the creation of entrepreneurial innovation.