Collaborative relationships: a stimulus for innovation culture and participation of SMEs in public procurement

PurposeThe role of small and medium enterprises (SMEs) in stimulating economic growth and innovation underscores the crucial need to understand the factors that influence their participation in public sector markets. Drawing on network theory, this research delves into the interaction effect of innovation culture and collaborative relationships on SME participation in public procurement. It assesses how collaborative relationships can serve as a vital mediator, enhancing the impact of innovation culture on SME participation in public procurement.Design/methodology/approachThe research was carried out with 248 SME suppliers in Ilala district, located in the Dar es Salaam region of Tanzania, utilizing a questionnaire survey and a stratified random sampling technique. Structural equation modeling (SEM) and the Hayes PROCESS macro were employed to analyze the data.FindingsThe study findings highlight collaborative relationships as a pivotal mediator between innovation culture and SME participation in public procurement. Although no direct link between innovation culture and SME participation in public procurement was established, the results indicate a noteworthy positive influence of innovation culture on collaborative relationships, subsequently affecting SME participation in public procurement.Practical implicationsThe research underscores the significance of promoting an innovation-driven culture to support the participation of SMEs within public procurement activities. Additionally, the research offers valuable perspectives on the role of collaborative relationships in stimulating innovation and achieving success in public procurement, guiding SME managers, policymakers and industry stakeholders in cultivating productive relationships and partnerships.Originality/valueThe research enhances both theoretical and practical insights, adding to the literature that addresses the effects of innovation culture and collaborative relationships on SME participation in public procurement. These insights can be valuable to policymakers and SME managers in designing appropriate strategies that foster an innovative culture and explore the benefits of collaborative relationships for effective participation in public procurement.