Relational social capital and frugal innovation: a moderated mediation model of external bricolage and competitive intensity

Abstract

Despite growing interest in frugal innovation, little is known about how relational social capital fosters frugal innovation through resource orchestration mechanisms and under varying competitive conditions. Using survey data from 338 batik-based SMEs in Indonesia and variance-based structural equation modeling (SmartPLS version 4), the findings indicate that relational social capital is positively associated with both external bricolage and frugal innovation. External bricolage is also positively associated with frugal innovation and serves as a partial explanatory mechanism linking relational social capital to frugal innovation. The conditional mediation analysis further suggests that this indirect relationship varies across levels of perceived competitive intensity. These findings contribute to the frugal innovation literature by highlighting relational social capital as an important social resource and by elucidating how relational resources may be translated into frugal innovation through external bricolage. The study also extends the application of social cognitive theory by demonstrating the relevance of social resource mobilization and resource orchestration processes in explaining frugal innovation among resource-constrained SMEs.