The nexus between responsible leadership and innovation performance of small and medium enterprises in Ho Chi Minh City, Vietnam

Abstract

This work unravels the nexus between Responsible Leadership (RL) and Innovation Performance (IP) in Small and Medium Enterprises (SMEs) in Ho Chi Minh City, Vietnam, while exploring the mediating effects of Socially Responsible Human Resource Management (SRHRM) and Human Capital (HC). This research utilises the Resource-Based View (RBV) and Stakeholder Theory (ST) by administering a questionnaire survey to gather data from 318 SMEs selected via a quota sampling method in Ho Chi Minh City, Vietnam. Structural Equation Modelling (SEM) results verify a significant interplay between RL and IP. Also, the results show a strong link between RL and SRHRM, as well as between RL and HC, which in turn enhances IP of SMEs. Additionally, we identified a mediating sequence involving SRHRM and HC in the positive correlation between RL and IP. These findings are important for understanding how RL affects SMEs’ IP and offer practical ways to enhance IP by using effective RL strategies. Consequently, companies should establish a framework of values that prioritise social responsibility and motivate organisational leaders to be fervent proponents of it.