DETERMINANTS OF RESPONSIBLE INNOVATION IN MALAYSIAN SMES: A TOE-BASED PERSPECTIVE

Abstract

This study investigates the key determinants that drive responsible innovation among small and medium-sized enterprises (SMEs) in Malaysia, drawing on the Technology–Organisation–Environment (TOE) framework. Specifically, it examines how relative advantage, environmental concern and policy orientation influence the adoption of responsible innovation practices. Based on survey data from 277 Malaysian SMEs, the results reveal that all three factors positively influence responsible innovation. Among them, relative advantage exerts the strongest effect, followed by environmental concern, while policy orientation has the least impact. These findings highlight that SMEs are more likely to pursue responsible innovation when they perceive clear business benefits, such as enhanced competitiveness or operational efficiency. Therefore, promoting the tangible advantages of responsible innovation should be a strategic priority. Meanwhile, fostering internal environmental awareness and strengthening alignment with sustainability values can further reinforce responsible innovation. Practical implications include encouraging policymakers to frame regulatory measures in ways that emphasise business incentives and providing support mechanisms for SMEs to recognise the value of responsible innovation. This study contributes empirical evidence from a developing country context, confirming that responsible innovation is not only ethically desirable but also strategically beneficial for SME.