The Impact of Technological Innovation on Business Model Innovation and Start-up Performance

Vu Van Dong, Tran Nha Ghi, Nguyen Quang Thu


The success rate of start-up firms in Vietnam could be low 20.8%. To address this issue, improving start-up performance through technological innovation and business model innovation is crucial. The relationship between technological innovation, business model innovation (BMI), and start-up performance has yet to be widely examined in developing countries like Vietnam. This study employs Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze data from 425 entrepreneurs. The findings reveal that technological innovation has a positive impact on business model innovation and start-up performance; business model innovation also has a positive impact on start-up performance; and the study identifies the partial mediating role of business model innovation between technological innovation and start-up performance. The results have practical implications for entrepreneurs, start-up founders, and policymakers. It emphasizes investing in technological and business model innovations to improve start-up performance. Lastly, the study highlights some limitations and suggests future research directions.


Doi: 10.28991/HEF-2023-04-03-01

Full Text: PDF


Technological Innovation; Business Model Innovation; Start-up Performance.


Ghi, T. N., Anh, N. T. P., Thu, N. Q., & Huan, N. Q. (2021). Entrepreneur’s human capital and business model innovation: The meditation role of access to start-up resources. International Journal of Information and Management Sciences, 32(1), 59–76. doi:10.6186/IJIMS.202103_32(1).0004.

Fatoki, O. O. (2011). The Impact of Human, Social and Financial Capital on the Performance of Small and Medium-Sized Enterprises (SMEs) in South Africa. Journal of Social Sciences, 29(3), 193–204. doi:10.1080/09718923.2011.11892970.

MPI. (2021). Decision on approving the digital transformation support program for businesses in the 2021-2025 phase. Ministry of Planning and Investment, Hanoi, Vietnam.

Foss, N. J., & Saebi, T. (2017). Fifteen Years of Research on Business Model Innovation: How Far Have We Come, and Where Should We Go? Journal of Management, 43(1), 200–227. doi:10.1177/0149206316675927.

Clauss, T. (2017). Measuring business model innovation: conceptualization, scale development, and proof of performance. R and D Management, 47(3), 385–403. doi:10.1111/radm.12186.

Trimi, S., & Berbegal-Mirabent, J. (2012). Business model innovation in entrepreneurship. International Entrepreneurship and Management Journal, 8(4), 449–465. doi:10.1007/s11365-012-0234-3.

Aspara, J., Hietanen, J., & Tikkanen, H. (2010). Business model innovation vs. replication: Financial performance implications of strategic emphases. Journal of Strategic Marketing, 18(1), 39–56. doi:10.1080/09652540903511290.

Geissdoerfer, M., Vladimirova, D., & Evans, S. (2018). Sustainable business model innovation: A review. Journal of cleaner production, 198, 401-416. doi:10.1016/j.jclepro.2018.06.240.

Sosna, M., Trevinyo-Rodríguez, R. N., & Velamuri, S. R. (2010). Business model innovation through trial-and-error learning: The Naturhouse case. Long Range Planning, 43(2-3), 383-407. doi:10.1016/j.lrp.2010.02.003.

Gao, Y., Shu, C., Jiang, X., Gao, S., & Page, A. L. (2017). Managerial ties and product innovation: The moderating roles of macro- and micro-institutional environments. Long Range Planning, 50(2), 168–183. doi:10.1016/j.lrp.2016.11.005.

Futterer, F., Schmidt, J., & Heidenreich, S. (2018). Effectuation or causation as the key to corporate venture success? Investigating effects of entrepreneurial behaviors on business model innovation and venture performance. Long Range Planning, 51(1), 64–81. doi:10.1016/j.lrp.2017.06.008.

Anwar, M. (2018). Business model innovation and SMEs performance-Does competitive advantage mediate? International Journal of Innovation Management, 22(7), 1850057. doi:10.1142/S1363919618500573.

Patzelt, H., Zu Knyphausen-Aufseß, D., & Nikol, P. (2008). Top management teams, business models, and performance of biotechnology ventures: An upper echelon perspective. British Journal of Management 19(3), 205–221. doi:10.1111/j.1467-8551.2007.00552.x.

Halecker, B., Bickmann, R., & Hölzle, K. (2014). Failed Business Model Innovation - A Theoretical and Practical Illumination on A Feared Phenomenon. R&D Management Conference 2014 - Management of Applied R&D: Connecting High Value Solutions with Future Markets, 03-06 June 2014, Stuttgart, Germany.

Hamelink, M., & Opdenakker, R. (2019). How business model innovation affects firm performance in the energy storage market. Renewable Energy, 131, 120–127. doi:10.1016/j.renene.2018.07.051.

Guo, H., Guo, A., & Ma, H. (2022). Inside the black box: How business model innovation contributes to digital start-up performance. Journal of Innovation and Knowledge, 7(2), 100188. doi:10.1016/j.jik.2022.100188.

Günzel, F., & Wilker, H. (2012). Beyond high tech: The pivotal role of technology in start-up business model design. International Journal of Entrepreneurship and Small Business, 15(1), 3–22. doi:10.1504/IJESB.2012.044586.

Orlikowski, W. J. (2000). Using Technology and Constituting Structures: A Practice Lens for Studying Technology in Organizations. Organization Science, 11(4), 404–428. doi:10.1287/orsc.11.4.404.14600.

Hamel, G., & Trudel, J. D. (2001). Leading the revolution. The Journal of Product Innovation Management, 3(18), 212-213.

Guo, H., Wang, C., Su, Z., & Wang, D. (2020). Technology Push or Market Pull? Strategic Orientation in Business Model Design and Digital Start-up Performance. Journal of Product Innovation Management, 37(4), 352–372. doi:10.1111/jpim.12526.

Kohli, R., & Melville, N. P. (2019). Digital Innovation: A Review and Synthesis, 29(1), 200–223.

Priem, R. L., Wenzel, M., & Koch, J. (2018). Demand-side strategy and business models: Putting value creation for consumers center stage. Long Range Planning, 51(1), 22–31. doi:10.1016/j.lrp.2017.07.007.

Chege, S. M., Wang, D., & Suntu, S. L. (2020). Influence of technology innovation intensity on firm performance: Technology innovation on firm performance - Case of Kenya. International Journal of Technology and Human Interaction, 16(2), 34–52. doi:10.4018/IJTHI.2020040104.

Koellinger, P. (2008). The relationship between technology, innovation, and firm performance-Empirical evidence from e-business in Europe. Research Policy, 37(8), 1317–1328. doi:10.1016/j.respol.2008.04.024.

Zaheer, A., & Bell, G. G. (2005). Benefiting from network position: Firm capabilities, structural holes, and performance. Strategic Management Journal, 26(9), 809–825. doi:10.1002/smj.482.

Baden-Fuller, C., & Haefliger, S. (2013). Business Models and Technological Innovation. Long Range Planning, 46(6), 419–426. doi:10.1016/j.lrp.2013.08.023.

OECD. (2004). The OECD Principles of Corporate Governance. Accounting and Administration, Organisation for Economic Co-operation and Development, 1-12. doi:10.22201/fca.24488410e.2005.562.

Bond, E. U., & Houston, M. B. (2003). Barriers to matching new technologies and market opportunities in established firms. Journal of Product Innovation Management, 20(2), 120–135. doi:10.1111/1540-5885.2002005.

Teece, D. J. (2010). Business models, business strategy and innovation. Long range planning, 43(2-3), 172-194. doi:10.1016/j.lrp.2009.07.003.

Santos, J., Spector, B., & Van der Heyden, L. (2011). Toward a Theory of Business Model Innovation within Incumbent Firms. SSRN Electronic Journal, INSEAD Working Paper No. 2009/16/EFE/ST/TOM. doi:10.2139/ssrn.1362515.

Carayannis, E. G., Sindakis, S., & Walter, C. (2015). Business Model Innovation as Lever of Organizational Sustainability. Journal of Technology Transfer, 40(1), 85–104. doi:10.1007/s10961-013-9330-y.

Teece, D. J., Pisano, G., & Shuen, A. (2009). Dynamic capabilities and strategic management. Knowledge and Strategy, 18(7), 77-116. doi:10.1093/oso/9780198781806.003.0019.

Achtenhagen, L., Melin, L., & Naldi, L. (2013). Dynamics of business models - strategizing, critical capabilities and activities for sustained value creation. Long Range Planning, 46(6), 427–442. doi:10.1016/j.lrp.2013.04.002.

Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing your business model. Harvard Business Review, 86(12), 52–60.

Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic management journal, 18(7), 509-533. doi:10.1002/(SICI)1097-0266(199708)18:7%3C509::AID-SMJ882%3E3.0.CO;2-Z.

Afuah, A. (2014). Business model innovation: Concepts, analysis, and cases. In Business Model Innovation: Concepts, Analysis, and Cases. Routledge, New York, United States. doi:10.4324/9780203584583.

Junarsin, E., Hanafi, M. M., Iman, N., Arief, U., Naufa, A. M., Mahastanti, L., & Kristanto, J. (2023). Can technological innovation spur economic development? The case of Indonesia. Journal of Science and Technology Policy Management, 14(1), 25-52. doi:10.1108/JSTPM-12-2020-0169.

Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long Range Planning, 43(2–3), 195–215. doi:10.1016/j.lrp.2010.01.004.

Zott, C., & Amit, R. (2011). The fit between product market strategy and business model: Implications for firm performance. The Competitive Dynamics of Entrepreneurial Market Entry, 29, 468–511.

Littunen, H., Storhammar, E., & Nenonen, T. (1998). The survival of firms over the critical first 3 years and the local environment. Entrepreneurship and Regional Development, 10(3), 189–202. doi:10.1080/08985629800000011.

Hill, S., Ionescu-Somers, A., Guerrero, M., Coduras, A., Roomi, M. M. A., Bosma, N., ... & Shay, J. (2022). Global Entrepreneurship Monitor 2021/2022 Global Report: Opportunity amid Disruption. Dubai Exhibition Center, Dubai, United Arab Emirates.

Zhang, Y., Zhao, S., & Xu, X. (2016). Business model innovation: an integrated approach based on elements and functions. Information Technology and Management, 17(3), 303–310. doi:10.1007/s10799-015-0225-5.

Velu, C. (2015). Business model innovation and third-party alliance on the survival of new firms. Technovation, 35, 1–11. doi:10.1016/j.technovation.2014.09.007.

Waldner, F., Poetz, M. K., Grimpe, C., & Eurich, M. (2015). Antecedents and consequences of business model innovation: The role of industry structure. Business models and modelling, 33, 347-386. doi:10.1108/S0742-332220150000033009.

Pedersen, E. R. G., Gwozdz, W., & Hvass, K. K. (2018). Exploring the Relationship between Business Model Innovation, Corporate Sustainability, and Organisational Values within the Fashion Industry. Journal of Business Ethics, 149(2), 267–284. doi:10.1007/s10551-016-3044-7.

Bouncken, R. B., & Fredrich, V. (2016). Learning in coopetition: Alliance orientation, network size, and firm types. Journal of Business Research, 69(5), 1753–1758. doi:10.1016/j.jbusres.2015.10.050.

Wei, Z., Yang, D., Sun, B., & Gu, M. (2014). The fit between technological innovation and business model design for firm growth: Evidence from China. R and D Management, 44(3), 288–305. doi:10.1111/radm.12069.

Jin, C., Liu, A., Liu, H., Gu, J., & Shao, M. (2022). How business model design drives innovation performance: The roles of product innovation capabilities and technological turbulence. Technological Forecasting and Social Change, 178, 121591. doi:10.1016/j.techfore.2022.121591.

García-Lopera, F., Santos-Jaén, J. M., Palacios-Manzano, M., & Ruiz-Palomo, D. (2022). Exploring the effect of professionalization, risk-taking and technological innovation on business performance. PLoS ONE, 17(2 February), 263694. doi:10.1371/journal.pone.0263694.

Li, S., Gao, L., Han, C., Gupta, B., Alhalabi, W., & Almakdi, S. (2023). Exploring the effect of digital transformation on Firms’ innovation performance. Journal of Innovation and Knowledge, 8(1), 100317. doi:10.1016/j.jik.2023.100317.

Reichert, F. M., & Zawislak, P. A. (2014). Technological capability and firm performance. Journal of Technology Management and Innovation, 9(4), 20–35. doi:10.4067/S0718-27242014000400002.

Nohria, N., & Gulati, R. (1996). Is slack good or bad for innovation? In Academy of Management Journal (Vol. 39, Issue 5, pp. 1245–1264). doi:10.2307/256998.

Hitt, M. A., Hoskisson, R. E., & Kim, H. (1997). International diversification: Effects on innovation and firm performance in product-diversified firms. Academy of Management Journal, 40(4), 767–798. doi:10.2307/256948.

Avermaete, T., Viaene, J., Morgan, E. J., & Crawford, N. (2003). Determinants of innovation in small food firms. European Journal of Innovation Management, 6(1), 8–17. doi:10.1108/14601060310459163.

Chesbrough, H. (2010). Business model innovation: Opportunities and barriers. Long Range Planning, 43(2–3), 354–363. doi:10.1016/j.lrp.2009.07.010.

Alam, S. S., Arumugam, V., Mohd Nor, N. G., Kaliappan, P., & Fang, L. S. (2013). Relationships between Innovation Capabilities, Business Performance, Marketing Performance and Financial Performance: A Literature Review. Business and Management Horizons, 1(1), 59. doi:10.5296/bmh.v1i1.3415.

Atalay, M., Anafarta, N., & Sarvan, F. (2013). The Relationship between Innovation and Firm Performance: An Empirical Evidence from Turkish Automotive Supplier Industry. Procedia - Social and Behavioral Sciences, 75, 226–235. doi:10.1016/j.sbspro.2013.04.026.

Shirokova, G., Vega, G., & Sokolova, L. (2013). Performance of Russian SMEs: Exploration, exploitation and strategic entrepreneurship. Critical Perspectives on International Business, 9(1), 173–203. doi:10.1108/17422041311299941.

Cooper, R. G., & Kleinschmidt, E. J. (1987). New products: What separates winners from losers? The Journal of Product Innovation Management, 4(3), 169–184. doi:10.1016/0737-6782(87)90002-6.

Jansen, J. J. P., Van Den Bosch, F. A. J., & Volberda, H. W. (2006). Exploratory innovation, exploitative innovation, and performance: Effects of organizational antecedents and environmental moderators. Management Science, 52(11), 1661–1674. doi:10.1287/mnsc.1060.0576.

Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries, game changers, and challengers (Vol. 1). John Wiley & Sons, New Jersey, United States.

Pirolo, L. (2010). The impact of social capital on the start-ups’ performance growth. Strategic Direction, 26(10), 12–14. doi:10.1108/sd.2010.05626jad.007.

Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. doi:10.1108/EBR-11-2018-0203.

Fornell, C., & Larcker, D. F. (1981). Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of Marketing Research, 18(1), 39. doi:10.2307/3151312.

Cohen, J., Cohen, P., West, S. G., & Aiken, L. S. (2013). Applied Multiple Regression/Correlation Analysis for the Behavioral Sciences, Third Edition. Applied Multiple Regression/Correlation Analysis for the Behavioral Sciences, 3th Edition. Routledge, London, United Kingdom. doi:10.4324/9780203774441.

Chin, W. W. (2016). Handbook of Partial Least Squares How to Write Up and Report PLS Analyses. Springer Handbooks of Computational Statistics, Springer, Berlin, Germany, 655-690. doi:10.1007/978-3-540-32827-8_29.

Cohen, J. (2013). Statistical Power Analysis for the Behavioral Sciences. Routledge, New York, United States. doi:10.4324/9780203771587.

Henseler, J., Hubona, G., & Ray, P. A. (2016). Using PLS path modeling in new technology research: Updated guidelines. Industrial Management and Data Systems, 116(1), 2–20. doi:10.1108/IMDS-09-2015-0382.

Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of E-Collaboration, 11(4), 1–10. doi:10.4018/ijec.2015100101.

Andreini, D., & Bettinelli, C. (2017). Business Model Innovation. From Systematic Literature Review to Future Research Directions. International Series in Advanced Management Studies, 21, 185.

Bashir, M., & Verma, R. (2017). Why Business Model Innovation Is the New Competitive Advantage. IUP Journal of Business Strategy, 14(1), 7–17.

Full Text: PDF

DOI: 10.28991/HEF-2023-04-03-01


  • There are currently no refbacks.

Copyright (c) 2024 Tran Nha Ghi