The Influence of Institutional Environment and Innovation Capacity on Supply Chain Performance and Competitive Advantage: Empirical Evidence from Ghana

Abstract

Purpose – This study examines the extent to which institutional environment influences innovation capacity, supply chain performance, and competitive advantage among small and medium enterprises (SMEs) in Ghana, drawing insights from institutional theory. Design/methodology/approach – The study employed a quantitative research design with survey strategy across five regions of Ghana (Ashanti, Western, Eastern, Northern, and Greater Accra). Primary data was collected from 250 SMEs using a structured questionnaire instrument. Descriptive and inferential statistical tools including hierarchical multiple linear regression were used to analyze the data. Findings – The results reveal that normative institutional systems exert a significant positive influence on innovation capacity among SMEs. Both normative systems and supply chain innovation positively and significantly influence supply chain performance. Furthermore, firm performance and supply chain innovativeness positively influence competitiveness. However, regulatory and cognitive institutional components showed statistically non-significant effects on innovation capacity and performance. Originality/value – This study extends institutional theory to the supply chain context in sub-Saharan Africa, providing empirical evidence on how normative institutional pressures shape innovation and performance outcomes among Ghanaian SMEs.