Sustainability 13 02351 v2

sustainability
Article
Supply Chain Integration, Interfirm Value Co-Creation and
Firm Performance Nexus in Ghanaian SMEs: Mediating Roles
of Stakeholder Pressure and Innovation Capability
Hongyun Tian 1, * , Samuel Kofi Otchere 1, * , Cephas P. K. Coffie 2,3 , Isaac Adjei Mensah 4
and Raphael Kwame Baku 5
1 School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, China
2 School of Management and Economics, University of Electronic Science and Technology of China,
Chengdu 611731, China; coffiecephas@gmail.com
3 All Nations University Business School, All Nations University, KF 1908 Koforidua, Ghana
4 Institute of Applied System Analysis (IASA), School of Mathematics, Jiangsu University,
Zhenjiang 212013, China; isaacadjeimensahphd@outlook.com
5 School of Economics and Finance, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, China;
raphaelbaku@yahoo.com
* Correspondence: 100003511@ujs.edu.cn (H.T.); samme20142015@gmail.com (S.K.O.);
Tel.: +86-159-5285-9235 (H.T.); +86-188-5289-9847 (S.K.O.)
Abstract: Strategic decisions like supply chain integration and interfirm value co-creation are sig-
nificant to SMEs’ performance. Therefore, this paper aims to find out the relationships between
supply chain integration, interfirm value co-creation, and firm performance in Ghanaian SMEs. We

employed a structural equation model (SEM) to estimate the responses of 473 SMEs registered with
the Association of Ghanaian Industries (AGI) to find the nexus between supply chain integration, in-
Citation: Tian, H.; Otchere, S.K.;
terfirm value co-creation, and the performance of Ghanaian SMEs. Further, we test for the mediating
Coffie, C.P.K.; Mensah, I.A.; Baku,
role of innovation capability and stakeholder pressure in the relationships between supply chain inte-
R.K. Supply Chain Integration,
Interfirm Value Co-Creation and Firm
gration and firm performance and the relationship between supply chain integration and interfirm
Performance Nexus in Ghanaian value co-creation, respectively. We found a positive significant relationship between the variables.
SMEs: Mediating Roles of Innovation capability mediates the positive relationship between supply chain integration and firm
Stakeholder Pressure and Innovation performance. Interfirm value co-creation has a negative relationship with the innovation capabilities
Capability. Sustainability 2021, 13, of SMEs. Therefore, Ghanaian SMEs can invest in technologies, which promote collaborations with
2351. https://doi.org/10.3390/ external parties to create value while minimizing cost.
su13042351
Keywords: supply chain integration; interfirm value co-creation; stakeholder pressure; innovation
Received: 23 January 2021
capability; SMEs; firm performance
Accepted: 17 February 2021
Published: 22 February 2021
Publisher’s Note: MDPI stays neutral

1. Introduction
with regard to jurisdictional claims in
published maps and institutional affil-
Globally, businesses face the challenge of delivering cutting edge products and services
iations. to satisfy the ever-evolving needs of customers. However, achieving this depends on
the successful acquisition, processing, storage, and generation of knowledge based on
internal and external business environments [1]. Integrative supply chain integration has
emerged as the perfect mechanism for businesses to achieve this agenda strategically [2,3].
It establishes a one-stop link between the information and communication systems of
Copyright: © 2021 by the authors.
heterogeneous parties to promote continuous information exchanges [4]. Empirically,
Licensee MDPI, Basel, Switzerland.
This article is an open access article
studies have established a strong positive correlation between supply chain integration
distributed under the terms and
and improved firm performance [2,4]. Despite these proofs, Ghanaian SMEs are unable
conditions of the Creative Commons to wholly benefit from supply chain integration because of low information technology
Attribution (CC BY) license (https:// diffusion, managerial inefficiencies, and inadequate financial resources [5]. Therefore, there
creativecommons.org/licenses/by/ is an urgent need to justify the need for Ghanaian SMEs to actively engage in supply chain
4.0/). integration to realize the far-reaching benefit.
Sustainability 2021, 13, 2351. https://doi.org/10.3390/su13042351 https://www.mdpi.com/journal/sustainability

Sustainability 2021, 13, 2351 2 of 18
Besides supply chain integration, co-creation has become a promising business strat-
egy promoting the participation of other parties in the design and creation of products
and services [6–8]. This collaboration can be business-to-customer or business-to-business.
While the former focuses on the contribution of customers, the latter engages other busi-
nesses in an interfirm value co-creation [9]. Interfirm value co-creation enables collaborating
firms to create value together while sharing expertise and resources. Empirically, interfirm
value co-creation is found to positively affect firm performance through the provision
of shared-value [10–12]. Further, firms engaged in supply chain integration are likely to
engage in interfirm value co-creation. Therefore, the constraints hindering Ghanaian SMEs
from actively engaging in supply chain integration could affect interfirm value co-creation
strategy deployment too [13]. Again, the authoritarian traits of most SME owners (unilat-
eral decision making), the fear of losing trade secrets, and rivalry affect the probability of
SMEs engaging in interfirm value co-creation in Ghana [6]. Consequently, there is a need to
establish an empirical nexus between supply chain integration, interfirm value co-creation,
and firm performance in Ghanaian SMEs to boost participation in these strategies.
Ghana is home to a dozen SMEs providing varied products and services. Statistically,
85% of all the businesses in Ghana are classified as SMEs. This suggests that economically,
this group of businesses contributes to employment, revenue generation, and innovation.
Over the past decade, the government of Ghana has instituted reforms to increase the
output of SMEs. These reforms encourage stress-free start-ups, the diffusion of information
technology, the provision of training and support, and financial assistance. While we
expect these changes to significantly affect SMEs’ participation in supply chain integra-
tion and interfirm value co-creation to boost firm performance, other constraints limiting
Ghanaian SMEs create uncertainty requiring research inquisition. However, existing litera-
ture [6,13,14] fails to examine this nexus fully in Ghana. We close this gap by examining the
relationship between supply chain integration, interfirm value co-creation, and firm perfor-
mance. Further, we examine the mediating roles of innovation capability and stakeholder
pressure in the relationships between supply chain integration and firm performance and
supply chain integration and interfirm value co-creation, respectively. We answer the
research questions: what are the relationships between supply chain integration, interfirm
value co-creation, and firm performance in Ghanaian SMEs? Do innovation capability and
stakeholder pressure mediate the relationship between supply chain integration and firm
performance, and supply chain integration and interfirm value co-creation? We test for
the mediating role of stakeholder pressure and innovation capability, because the former
influences the decision making of management, while the latter provides infrastructural
supports for supply chain integration and interfirm value co-creation activities.
To estimate these relationships, we employ survey data from 473 SMEs in a structural
equation model. The results from the study reveal that there is a significant positive rela-
tionship between supply chain integration and firm performance, supply chain integration
and interfirm value co-creation, interfirm value co-creation, and firm performance. Further,
innovation capability mediates the positive relationship between supply chain integra-
tion and firm performance, while stakeholder pressure mediates the positive relationship
between supply chain integration and interfirm value co-creation. Consequently, this
outcome is significant to SMEs owners, government, and scholars, because it justifies the
need for investment in information technology to support these business strategies. It
also challenges the government to continually provide policies and management support
for SMEs to resolve managerial inefficiencies that hinder the diffusion of these strategies.
Further, it creates rich knowledge sources and challenges deeper research inquisition to
boost productivity in this sector.
The remainder of the paper is organized as follows: literature review and formulation
of hypothesis, explanation of the adopted research methods for the conduct of the study
and model development, data analysis, presentation, and the discussion of the results
from the analysis and the provision of suitable recommendation for policymakers and
future studies.
2. Literature Review and Hypothesis Development

This section presents and discusses literature related to the research constructs. Further,
the propositions of the study are discussed.
2.1. Supply Chain Integration

The deliberate interconnection between supply chain partners to share valuable infor-
mation on the market, products, customers, and new potential markets to make strategic
decisions is supply chain integration [15,16]. Companies with efficient internal integra-
tion can successfully create a conducive environment to support supply chain integration
with partners to improve organizational performance, because the great internal structure,
culture, and processes serve as the solid foundation for any successful external collabo-
ration [17]. Studies point to the positive role of supply chain integration in enhancing
organizational performances. Zhao et al. [18] studied 195 Chinese organizations and results
from the study reveals the strategic alignment of organizations’ competitive advantage
with partners in a supply chain integration is key in improving the financial performance.
Notably, an organization engaged in supply chain integration can significantly improve
performance through enhanced customer service, internal operations efficiency, demand
flexibility, new market development, and product development improvements [2]. How-
ever, studies assert that for an organization to fully benefit from supply chain integration,
the relationship between partners should be aligned properly with the organization’s
competitive strategy [3,4]. To ensure sustainability in collaboration, sometimes it is in the
best interest of organizations to enter partnerships with the win–win strategy to help simul-
taneously support each organization’s objective and to reap the full potential benefits of the
collaboration, since each party is motivated towards a common outcome [19]. Irrespective
of the benefits accruing from the supply chain integration partnerships, there are potential
challenges that could mar the success of these partnerships if not managed properly. Com-
munication failure, inadequate resources, organizational culture and structure, issues of
trust, misalignment of strategic objectives, and unresolved conflicts within an organization
leads to challenges in a supply chain integration partnership [20]. While these challenges
could be linked directly to an organization’s own internal structure inefficiencies, there are
potential looming external challenges too. Most importantly, the risk of losing trade secrets
or giving out sensitive information to key competitors when not intended also become a
major challenge as the other challenges mentioned previously [21,22]. Nevertheless, the
benefits of collaborations are enticing enough to challenge management towards finding a
solution to these potential impending challenges.
2.2. Interfirm Value Co-Creation

Value co-creation is a deliberate act to create value in terms of products, services, or
processes by engaging actors within a specific ecosystem [23]. It is a manner of business
strategy that focuses on the generation and ongoing realization of mutual organization-
customer value [24]. This is closely related to supply chain integration, because in both
cases, a firm needs to open up to external parties [25]. While these two strategies have
varying end-products, we expect SMEs engaged in supply chain integration to participate
in interfirm value co-creation. This is because supply chain integration creates a platform
for interfirm value co-creation to thrive without extra cost [9]. Nonetheless, these strategic
decisions could be driven by stakeholder pressure or the innovative capabilities of the
firm [6,14]. In a typical value co-creation ecosystem, members can take different forms: the
idea generator, the designer, or an intermediary to create value for all parties involved [26].
Similar to supply chain integration, the issue of transparency is coming up, and mem-
bers within the partnership are required to clearly define their roles, their identity, and
their potential contribution to the partnership [7]. Value co-creation comes in two main
categories: business-to-customer platforms, where co-creation activities mainly involve
the business and both existing and potential customers; and business-to–business, where
businesses within the same industry or different industry co-create value for their mutual
gains [25]. Early studies paid considerable attention to business-to-customer platforms,

making studies on business-to-business value co-creation relatively understudied [7]. Pre-
viously, organizations contested for resources, customers, and market share with little
concern for collaborative creations. However, the current trend favors healthy competition
and collaboration within an ecosystem with the aim of sustainable growth [23]. Organi-
zations need to align promptly in a value co-creation partnership to take advantage of
the integration of the resources to benefit from the partnership [8,26]. Value co-creation
is proven to affect organizations’ performance in areas like cost savings, efficient use of
resources, and efficient marketing in terms of complementary services.
2.3. Firm Performance

Firm performance broadly covers both financial and non-financial aspects. The sur-
vival and sustainability of all businesses irrespective of size, location, and nature of service
depend on consistent firm performance [13,27]. Yu et al. [28] explain financial perfor-
mance to include improvement in the cost of production, the collection, and processing
of information, while the non-financial performance of firms includes improvement in
relationships with partners. Therefore, strategic decisions like supply chain integration
and interfirm value co-creation, which lead to improvements in these areas, are desirable
for organizational performance [21]. Consequently, we expect Ghanaian SMEs to practice
following these strategies to increase firm performance financially and non-financially. An
effective supply chain management creates short-term economic benefits and long-term
competitive advantages [17]. Although studies suggest a positive relationship between
value co-creation and firm performance, few have fully conceptualized it [16]. For example,
Rajapathirana and Hui [12] found that supply chain integration can establish a close link
between manufacturing and distribution processes to deliver products and services in
a timely and efficient manner. Efficient supply chain integration enables manufacturers
to use accurate information about customer needs and preferences to accelerate product
delivery processes, improve production schedules, and reduce inventory obsolescence [2].
Supply chain integration with suppliers and customers can enhance manufacturers’ new
product development capability; promote product quality, flexibility, and innovation; and
product competitive advantage [21,29]. Enterprise performance refers to the extent to
which an enterprise can achieve sustainable competitive advantage by utilizing valuable,
rare, imitable, and non-strategic resources. To this effect, the innovation capability of firms
plays a significant role in the extent of resource utilization [11]. Therefore, we expect SMEs
with high innovative capabilities to improve performance significantly.
2.4. Stakeholders Pressure

Recent literature points to the positive significant contribution of stakeholder pres-
sure in improving the overall performance of firms [28]. Stakeholders are individuals or
institutions with a direct or indirect interest in the outcomes of an organization. While
some stakeholders have a monetary interest in organizations, others seek to protect the
interest of the society and environment. Konadu et al. [14] consider ten different external
stakeholders: customers, suppliers, competitors, industry associations, local communi-
ties, environmental organizations, regulators/legislators, media, and shareholders’ funds.
While the former has a greater influence on organizations in terms of decision making,
the latter has relatively minimal influence except in rare instances [30]. The pressure of
stakeholders comes from consumers, investors, regulatory requirements, and even NGOs
sometimes. As pointed out in stakeholder theories, primary stakeholders are directly or
indirectly involved in the shaping of the organization’s goals, which leads to profitability
and eventual survival of the business [28]. Pressure from this class of stakeholders has the
potential of influencing the decisions and actions of management towards the practice or
non-practice of supply chain integration strategy [30]. Evidence supports the significance of
stakeholder pressure in driving the practice of supply chain integration, which potentially
leads to the improvement in organizational performance [14]. Yu et al. [28] reported that
companies that consider shareholders or stakeholders (including them in the corporate

strategy) will have a more positive relationship between corporate performances. This is
consistent with Freeman’s [31] original research, which indicates that the pressure from
internal or external stakeholders would significantly encourage the company to improve
performance. Maas and Schuster [32] also point out that by adopting progressive environ-
mental management, a company will face fewer internal/external conflicts, which leads to
improvement in firm performance. The pressure from stakeholders drives management to
make decisions that promote short- and long-run organizational growth [14]. Following,
Ahinful et al. [33] report the positive impact of stakeholder pressure on corporate perfor-
mance. Betts et al. [34] find a positive correlation between community stakeholder pressure
and corporate performance. Again, Ahinful et al. [33] suggest that enterprises adopt an
environmental management system to improve environmental performance. Mensah [27]
also established a positive relationship between stakeholder pressure and supply chain
integration initiatives of firms.
2.5. Innovation Capability

The innovation capability of firms is an overall capability encompassing the ability to
absorb, adapt, and implement technologies to improve the processes and outcomes of the
organization. Rajapathirana and Hui [12] find that the innovation effort of organizations
positively affects innovation capability and firm performance. This suggests that activi-
ties such as interfirm value co-creation and supply chain integration could increase the
probability of firms diffusing new technologies. This is consistent with the findings of Le
and Lei [11], to indicate that knowledge sharing between internal and external organiza-
tional parties improves innovation capability. According to Shafi [10], interactions with
customers and competitors promote innovation within organizations. Thus, activities that
promote these interactions should be encouraged to drive the innovation capabilities of
firms. Further, Mendoza-Silva [9] reveals that the cordial relationship between internal and
external organizational parties greatly improves the innovation capability of firms through
knowledge sharing activities. However, Kim et al. [1] find that management capabilities
and external networking promotes innovation within firms. Contrary, insufficient resources
and structural rigidity stifles initiative within firms. Further, Donkor et al. [13] show that
organizations with strategic goals are likely to innovate to enhance firm performance
compared to those without a clearly defined strategy. According to Donbesuur et al. [6], the
technological innovation of firms is a key ingredient of organizational productivity. This
reveals that innovation capability is key in the nexus between interfirm value co-creation,
supply chain integration, and organizational performance.
2.6. Hypothesis Development

Figure 1 depicts the projected relationships between the study variables. Considering
the topic under discussion, the research conceptual model was constructed following
relevant literature and the research objectives. The figure depicts the affiliations between
supply chain integration, stakeholder pressure, value co-creation, and firm performance,
respectively. In all, ten (10) research hypotheses were derived to verify the relationships
between the aforementioned variables.
Figure 1. Conceptual study model.
Empirically, financial and non-financial firm performance is evidenced to be influ-

enced by interfirm value co-creation and supply chain integration [17,23,25]. Specifically,
Frempong et al. [20] establish a positive relationship between new product development,
employee creativity, new market entry, and interfirm value co-creation. Thus, SMEs are
likely to increase firm performance with interfirm value co-creation. Further, Zhao et al. [18]
posit a positive relationship between supply chain integration and efficient resource man-
agement, sales growth, and profitability. Consequently, we postulate in hypotheses 1a and
1b that the engagement of Ghanaian SMEs in interfirm value co-creation and supply chain
integration improves firm performance.
Hypothese 1a (H1a). Interfirm value co-creation positively affects firm performance in Ghana-
ian SMEs.
Hypothese 1b (H1b). Supply chain integration positively affects firm performance in Ghana-
ian SMEs.
Besides interfirm value co-creation and supply chain integration, literature establishes
a positive nexus between stakeholder pressure, innovation capability of firms, and firm
performance [1,12,30,33]. Stakeholder groups have varied requirements, and thus pres-
sure from these heterogeneous groups influences management decisions [34]. According
to Mensah [27], stakeholder pressure increases firm profitability and corporate social re-
sponsibility. Further, the innovation capability of firms determines how far firms explore
resources. Per Rajapathirana and Hui [12], the innovative capability of firms increases
efficient resource management and firm profitability. Therefore, we hypothesize 2a and
2b to establish the influence of stakeholder pressure and innovation capability on the
performance of Ghanaian SMEs.
Hypothese 2a (H2a). Stakeholder pressure positively affects the performance of Ghanaian SMEs.
Hypothese 2b (H2b). The innovation capability of Ghanaian SMEs affects firm performance.
The timely ability of firms to employ new methods, tools, and equipment to execute
the tasks is evidenced to be influenced by the openness of organizations to assimilate both
internal and external information [4,24]. According to Mendoza-Silva [9], firms engaging
in supply chain integration have a higher probability of using new tools and methods. This
is possible because improved processes and methods are required for efficient integration.
Further, interfirm value co-creation positively influences the innovativeness of firms [10,23].
This is because firms have the opportunity to acquire new skills and use new methods or
processes through the interfirm co-creation process. Therefore, we hypothesize 3a and 3b
to estimate the influence of supply chain integration and interfirm value co-creation on the
innovation capability of Ghanaian SMEs.
Hypothese 3a (H3a). Supply chain integration practice in Ghanaian SMEs positively affects
innovation capability.
Hypothese 3b (H3b). Interfirm value co-creation practice in Ghanaian SMEs positively affect
innovation capability.
Supply chain integration is a strategic decision that requires the commitment of
firm resources, whose outcome should benefit all stakeholders. Consequently, literature
establishes a positive relationship between stakeholder pressure and the practice of supply
chain integration in firms [14,17,27]. Further, to maximize resources, firms engaged in
supply chain integration are likely to engage in interfirm value co-creation to share the
information acquisition and distribution infrastructure within the organization [4,17,24].
Therefore, we posit hypothesis 4a to establish the influence of supply chain integration
on the diffusion of interfirm value co-creation in Ghanaian SMEs. Further, we theorize
hypothesis 4b to find the influence of stakeholder pressure on the decision of Ghanaian
SMEs to engage in supply chain integration.
Hypothese 4a (H4a). Supply chain integration positively drive the diffusion of interfirm value
co-creation in Ghanaian SMEs.
Hypothese 4b (H4b). Stakeholder pressure positively influences supply chain integration practice
in Ghanaian SMEs.
Empirically, supply chain integration and innovative capability of firms are evidenced
to influence firm performance positively [4,6,12,25]. However, these variables exert differ-
ent influences on firm performance. Further, the firm innovative capability is theorized to
influence supply chain integration success and firm performance [12,13]. Thus, because the
innovative capability of firms determines how best supply chain integration is executed,
the nexus between supply chain integration and firm performance could be explained by
innovation capability. Therefore, we assume that the relationship between supply chain
integration and SMEs performance in Ghana is influenced by innovation capability.
Hypothese 5 (H5). The innovation capability of Ghanaian SMEs mediates the positive relationship
between supply chain integration and firm performance.
Stakeholders influence the decision-making process or management [27,32]. Therefore,
strategic decisions like supply chain integration and interfirm value co-creation could be
influenced by stakeholder pressure. Empirically, literature establishes that stakeholders’
pressure influences supply chain integration in firms [14,30,32]. Further, Yu et al. [28]
find a significant positive relationship between stakeholder pressure and interfirm value
co-creation. Thus, the relationship between supply chain integration and interfirm value co-
creation could be strengthened by pressure from stakeholders. Consequently, we theorize
that stakeholder pressure influences the relationship between supply chain integration and
interfirm value co-creation in Ghanaian SMEs.
Hypothese 6 (H6). Stakeholder pressure mediates the positive relationship between supply chain
integration and interfirm value co-creation practice in Ghanaian SMEs.
3. Research Methods
3.1. Data Source and Sampling Procedure
The study explores the relationship between supply chain integration, interfirm value
co-creation, and firm performance. Further, we examine the mediating roles of innovation
capability and stakeholder pressure. The study is quantitative in nature with support-
ing survey data from SMEs in Ghana. Currently, Ghana is home to several SMEs [5,6].
Therefore, to streamline the study, we employ two sampling techniques: purposive non-
probability sampling and simple random probability sampling. Using the purposive
sampling technique, we include only SMEs documented with the association of Ghanaian
Industries (AGI). This group of SMEs is appropriate for the study, because they have
frequent training on industry best managerial practices. Per AGI, there are 1600 plus active
members scattered across the country. Consequently, we are unable to include all these
SMEs in the study. Therefore, we sample further using the simple random probability
technique. Consistent with other studies [35], this provides equal inclusion opportunities
for SMEs without bias. However, SMEs with invalid e-mails and unreachable telephone
numbers are replaced in the process. Following, a total of 645 SMEs with valid emails
and reachable telephone numbers are included as the final sample of the study. Per the
one-third sampling rule, the final sample of 645 is representative of the study popula-
tion. Thus, this provides substantiation for the generalization of our research findings. To
collect data, a structured five-part closed-ended survey instrument covering respondent
demographics, interfirm value co-creation, innovation capability, supply chain integration,
stakeholder pressure, and firm performance is employed. The target respondents are the
chief executive officers (CEOs) or owners of SMEs. This decision is justified by the fact
that most SMEs in Ghana have owners doubling as CEOs. Therefore, strategic decisions
like the engagement in interfirm value co-creation and supply chain integration rest with
CEOs or the owners. To ensure the suitability of the survey instrument, we employ the
split-half by sending a sample of the instrument to 25 of the selected SMEs. Afterward,
changes were made to the instrument to provide clarity and ensure internal consistency. To
draft the final questionnaire, the improved instrument is further sent to 15 of the selected
SMEs. This process produced a refined instrument free from ambiguity. The approved
questionnaire was then sent to the 645 SMEs via email. The entire data collection period
lasted between March–August 2020. The final response generated yielded 473 (645). This
difference is accounted for by no response due to the fact that some SMEs did not attend to
their emails or answer our follow-up telephone calls and the elimination of participants
based on incomplete responses. Nonetheless, the response rate is great and thus reduces
the probability of non-response rate bias. Therefore, the outcome of the study is not affected
by the number of respondents.
3.2. Measurement of Constructs

In the context of construct measurements, the questionnaire was structured to evaluate
the relationship between five construct variables, which include supply chain integration,
innovation capability, stakeholder pressure, value co-creation, and firm performance.
Table 1 provides details of the measurement construct and the number of elements. Specif-
ically, the interfirm value co-creation construct consists of two elements, approach and
measure. The first element (approach) focuses on the different methods adopted by SMEs
to engage in interfirm value co-creation and consists of four items, whereas the second
element (measure) captures the benefits and challenges of interfirm value co-creation in
the SMEs and also consists of seven items [7,8,26]. Innovation capability constructs, on
the other hand, are characterized by four elements (investment in an information system,
investment in new machines, new methods, and new processes). Summarily, each of the
aforementioned components of innovation capability construct is measured using an item
(one item each). [9,12,13]. Moreover, the supply chain integration construct also has four
elements, where system coupling and collaboration between SMEs and others, respectively,
are measured using two measurement items each, whereas joint decision together with in-
formation sharing is measured using four items each [2,4,15]. Concerning the components
of supply chain integration, system coupling focuses on the ability for SMEs to connect
their systems with the systems of other firms, while joint decision captures the ability of
SMEs to engage in group decision making with heterogeneous parties. Information sharing
also focuses on the ability of SMEs to share information between departments and other
parties in the supply chain, and collaboration captures the different levels of partnerships
engaged in by the SMEs. Further, the stakeholder pressure consists of two elements in-
cluding internal stakeholders (measured using two items), which captures the influence of
parties within the SMEs and external stakeholders (characterized by 10 measurement items)
centers on parties outside the business environment of the SMEs [27,30,32]. Finally, the firm
performance construct consists of two elements: financial firm performance (consisting of
three items) captures the profitability and growth in sales revenue, and non-financial firm
performance (measured by five items) focuses on market share growth, customer retention,
and improvement in corporate image of SMEs [25,36].
Table 1. Questionnaire development and measurement constructs.
Constructs Elements Measures References

Approaches 4 questions
Inter-firm value co-creation [7,8,26]
Measure 7 questions
Information system 1 question
New machines 1 question
Innovation capability [9,12,13]
New methods 1 question
New processes 1 question
System coupling 2 questions
Joint decision 4 questions
Supply chain integration [2,4,15]
Information sharing 4 questions
Collaborations 2 questions
Internal 2 questions
Stakeholders pressure [27,30,32]
External 10 questions
Financial 3 questions
Firm performance [25,36]
Non-financial 5 questions
3.3. Theoretical Model Specification

The structural equation model (SEM) is employed in this study to examine the mediat-
ing role of stakeholder pressure and innovation capability through the effect of supply chain
integration and inter-firm value co-creation on firm performance. Using the SmartPLS, we
assess the psychometric properties. A structural equation model is a statistical method that
allows complex relationships between one or more independent latent variables and one or
more dependent latent variables. Summarily, the structural model establishes relationships
between the latent variables both response and explanatory. Specifically, the measure-
ment model theoretically consists of the following equations, using standard notations by
Bollen [37];
x 1 = λ 1 ξ 1 + θ 1 y 1 = λ 3 η1 + ε 1
x 2 = λ 2 ξ 2 + θ 2 y 2 = λ 4 η1 + ε 2 (1)
x 3 = λ 3 ξ 3 + θ 3 y 3 = λ 5 η1 + ε 3
where xs and ys are the observed variables for the latent variables, ξ 1 ’s and ηi ’s represents
the latent (constructs) variables, λi ’s are the factor weights, and θi ’s and ε i ’s are the residual
terms. In matrix form, the measurement model as specified in Equation (1) is expressed as:
X = Λx ξ + θ
(2)
Y = Λy ξ + ε
Based on the theoretical model specification, an assumption can be made that series
of regression equations are to be estimated to assess the causal effects amid the variables
employed in the study, which can be found in the structural model as Figure 1 depicts.
Thus, regarding the theoretical model formulated in Equation (1) and the structural model
from Figure 1, the series of regression equations to be estimated as specified as follows:
InterVCi = β 0 + β a FpMi + ε i (3)
SupChaini = β 0 + β a FpMi + ε i (4)

InterVCi = β 0 + β b SupChaini + ε i (5)
SthPi = β 0 + β b SupChaini + ε i (6)

InCi = β 0 + β a SupChaini + ε i (7)
ShPi = β 0 + β c FpMi + ε i (8)
SupChaini = β 0 + β c InCi + ε i (9)
InterVCi = β 0 + β c InCi + ε i (10)
SupChaini = β 0 + β d InCi∗ + β a FpMi + ε i (11)
SupChaini = β 0 + β d SthPi∗ + β f InterVCi + ε i (12)
where FpM, SupC, InterVC, InC, and ShP represent firm performance, supply chain inte-
gration, value co-creation, innovation capability, and stakeholder pressure, respectively.
Notably, InC*, and ShP* serve as mediating variables. Thus, Equations (11) and (12)
estimate the mediating effect of innovation capability and stakeholder pressure on the
relationship between supply chain integration and firm performance as well as supply
chain integration and interfirm value co-creation, respectively. Table 2 gives a summary of
the relationships to be estimated.
Table 2. Test of the mediated relationship between variables.
Model Predictors Mediator Criterion

1 InterVC ————————————————————-> FpM
2 SupC ————————————————————-> FpM
3 InterVC ————————————————————-> SupC
4 ShP ————————————————————-> SupC
5 InC ————————————————————-> SupC
6 ShP ————————————————————-> FpM
7 SupC ————————————————————> InC
8 InterVC ————————————————————-> InC
9 SupC ———————————–InC——————–> FpM
10 SupC ————————————ShP——————-> InterVC
Note: FpM, SupC, InterVC, InC, and ShP represent financial performance, supply chain integration, inter-firm value co-creation, innovation
capability, and stakeholder pressure, respectively, ———> indicates the direction of causal relationship to be estimated for a specific model.
4. Statistical Analysis
4.1. Descriptive Analysis
The online survey instrument gathered data from a total of 473 (100%) SMEs in Ghana
was analyzed. Table 3 shows the output. Specifically, we focused on the chief executive
officers (CEOs) of these businesses. The rationale behind this is that most SMEs in Ghana
are owned and controlled by the CEOs. Therefore, the target respondents are suitable
for the objectives of the study. Table 4 depicts the results from the descriptive analysis.
Male (77.0%) CEOs dominate the SMEs sector in Ghana. The majority of CEOs in Ghana
fall between the ages of 26–30 years (48%) and 31–35 years (27.5%). This is positive for
the development of the sector, since younger CEOs have a higher probability to learn [5].
Concerning education, 93.9% of the CEOs have tertiary level education. This also increases
the ability of the CEOs to acquire new skills to resolve management inefficiencies [13].
However, most of the SMEs in Ghana engages in service-related businesses (70%). This
supports the reason why Ghana depends largely on imports to satisfy the needs of the
country (Yahaya et al., 2019). Further, most of the SMEs are located in urban areas (76.5%).
This is common in developing countries, because urban areas provide good infrastructure
unlike rural areas [5]. Finally, most of the SMEs sampled have between 10–50 employees
(72.1%). This reveals the expansion difficulties of SMEs in the country. Consequently, the
study skews more toward smaller businesses than medium-size businesses in Ghana.
Table 3. Response rate and characteristics.
Variables Frequency Percentage

Gender Male 364 77.0%
Female 109 23.0%
Age 18–25 years 33 7.0%
26–30 years 227 48%
31–35 years 130 27.5%
36–40 years 40 8.5%
41 years or over 43 9.1%
Education Basic 4 0.8%
Secondary 25 5.3%
Tertiary 444 93.9%
Nature of Business Service 331 70.0%
Manufacturing 50 10.6%
Service and manufacturing 93 19.4%
Location Urban 362 76.5%
Rural 111 23.5%
Employees 10–50 341 72.1%
51–100 43 7.2%
101 or more 98 20.7%
Table 4. Reliability Test.
Variables Cronbach’s Alpha Composite Reliability

InterVC 0.738 0.823
InC 0.701 0.811
SupC 0.924 0.945
ShP 0.847 0.873
FpM 0.893 0.901
4.2. Reliability and Validity Tests

To ensure the reliability of the research instrument, we employ Cronbach’s alpha and
composite reliability tests. Table 4 depicts the test results. Specifically, we use Cronbach’s
alpha to test for internal consistency and item reliability. Per the results from Cronbach’s
alpha, all our variables have values greater than 0.7 to suggest that the research instrument
is capable of measuring the stated constructs. Further, we use the composite reliability
test to measure the overall scale reliability of the instrument. The output shows values
greater than 0.8 to prove that overall, the research instrument is reliable. Consequently, this
provides adequate evidence to support the outcome of the study.
Further, we proceed to test the validity of the research instrument by employing the
cross-loading factor and average variance extracted (AVE). Table 5 depicts the results of
the cross-loading factor and the AVE. Hypothetically, the cross-loading factor should have
values greater than 0.7. Therefore, items that did not load within this scale were eliminated.
In total, 15 items were removed: InterVC (AP4, MS1, MS3, MS4), InC (IN1), SupC (DS1,
IS3), ShP (SPE1, SPE5, SPE7, SPE8, SPE9, SPE10), and FpM (FP3, NF3). All the remaining
items loaded with values greater than 0.7. This proves that the items adequately support
the various constructs within the study.
Table 5. Cross-loading factor and average variance extracted.
InterVC InC SupC ShP FpM

AP1 0.831 0.203 −0.075 −0.088 0.049
AP2 0.840 0.050 −0.070 0.311 0.052
AP3 0.803 −0.004 −0.009 0.228 0.516
MS2 0.795 −0.169 −0.384 −0.034 0.153
MS5 0.796 −0.279 −0.364 0.223 0.047
MS6 0.769 −0.361 −0.322 0.184 0.069
MS7 0.735 −0.396 −0.044 0.118 0.069
IN2 0.225 0.725 0.264 0.480 0.226
IN3 0.074 0.784 0.087 0.254 0.244
IN4 0.043 0.787 0.195 −0.086 0.326
SCI 0.441 0.292 0.736 −0.406 0.360
SC2 0.583 0.350 0.838 0.031 0.027
DS2 0.670 0.236 0.788 −0.144 −0.233
DS3 0.750 0.172 0.766 −0.105 0.060
DS4 0.629 0.283 0.811 0.075 0.029
IS1 0.616 0.366 0.806 0.033 0.183
IS2 0.716 0.307 0.836 −0.286 −0.178
IS4 0.690 0.171 0.813 −0.214 −0.287
CL1 0.589 0.316 0.874 −0.175 0.318
CL2 0.701 0.340 0.875 −0.331 −0.052
SPI1 0.599 −0.255 −0.161 0.767 0.034
SPI2 0.412 0.040 .095 0.722 −0.418
SPE2 0.650 −0.144 .009 0.780 −0.213
SPE3 0.576 −0.252 −0.002 0.803 0.002
SPE4 0.549 0.164 0.131 0.828 −0.209
SPE6 0.516 0.261 −0.019 0.786 −0.195
FP1 0.612 −0.408 0.306 −0.262 0.797
FP2 0.629 −0.361 0.383 −0.196 0.863
NF1 0.698 −0.229 0.369 −0.054 .736
NF2 0.633 −0.151 0.320 −0.181 0.804
NF4 0.698 −0.215 0.200 0.227 0.787
Average variance extracted 0.72 0.64 0.69 0.77 0.59
The output of the AVE, as shown in Table 5, is expected to be greater than 0.5. Conse-
quently, the constructs employed in our study show average variance extracted values 0.72,
0.64, 0.69, 0.77, and 0.59 to prove that the research instrument meets both reliability and
validity requirements to warrant further investigation. Therefore, we proceed to estimate
our structural equation model outlined in Figure 1.
4.3. Hypothesis Testing

After fulfilling both the reliability and validity test, we test the study hypotheses using
the smart PLS. Table 6 is the estimation output. At a 5% (0.05) significant level, we find that
all the hypotheses (H1–H10) are accepted. However, except for the relationship between
InterVC and InC, which is negative, all the other relationships are positive. Specifically,
InterVC positively affects FpM. Thus, a unit increase in the InterVC activities improves FpM
by 0.16a . This is consistent with the findings of existing studies [19,25]. SupC positively
affects FpM; an increase in SupC activities increases FpM by 0.14a . This is why scholars
advocate for the promotion of SupC between firms [17]. Again, we find that InterVC
positively affects SupC within SMEs in Ghana. Thus, a unit increase in InterVC improves
SupC by 0.20a . Empirically, InterVC activities are proven to encourage SupC within
firms [24]. The relationship between ShP and SupC per our analysis is positive. This means
an increase in ShP increases SMEs SupC activities in Ghana by 0.47a . Stakeholders exert
pressure on management to make the right decisions for the benefit of all [27,32]. Further,
we find that InC has a positive relationship with SupC. Statistically, a unit increase in InC
increases SupC by 0.20a . This reveals the need for advanced technologies to adequately
ically,
proves InterVC
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0.000b a Indirect
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level
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0.020 Indirect Supported
—SupC Inc FpM
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a a
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and SupC—ShP 1%
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level
InC of −0.007 respectively.
significance, 0.000 Direct Supported
H5 —SupC Inc FpM 0.066 0.020 b Indirect Supported
H6 b
Note: a and SupC—ShP1% and 5%InterVC 0.020 respectively.
0.007 a Indirect Supported
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level of significance,
FpM 0.066 0.020 b a Indirect Supported
Note: aH6 SupC—ShP
and b represent 1% and 5% InterVC 0.020
level of significance, 0.007
respectively. Indirect Supported
Note: H6a and b represent
SupC—ShP 1% andInterVC 0.020
5% level of significance, 0.007 a
respectively. Indirect Supported
Note: a and b represent 1% and 5% level of significance, respectively.
Figure 2. Estimation output of the model.

5. Discussion
The study estimates the relationships between supply chain integration, interfirm
value co-creation, and firm performance in Ghana. Further, we estimate the mediating
effects of innovation capability and stakeholder pressure in the relationships between
supply chain management and firm performance and interfirm value co-creation and firm
performance, respectively. All the hypotheses show a positive relationship except the
relationship between interfirm value co-creation (InterVC) and innovation capability (InC).
Synonymous with existing literature [24,25], interfirm value co-creation (InterVC) im-
proves firm performance (FpM) in Ghanaian SMEs. While this is expected, it also signifies
that SMEs in Ghana are now more open to collaborations with other businesses, unlike
decades ago. Previously, Ghanaian SMEs were known to be secretive about their operations
due to the fear of losing trade secrets and customers to their competitors. Therefore, the
turnaround in this area could be explained by the current demand for superior goods and
heightened competition in the sector [14,27]. Consequently, growth in this sector could
be propelled by government policies and incentives that promote collaboration and fair
competition in the industry. InterVC positively affects supply chain integration (SupC) in
Ghanaian SMEs. This outcome confirms the existing hypothesis on the relationship be-
tween SupC and InterVC [16,38]. However, the case of Ghanaian SMEs could be explained
by the need to reduce cost and improve efficiency and survival. Currently, the Ghanaian
SMEs industry is witnessing expansive growth with the influx of new players. Therefore,
the need to create superior goods at the right time and cost is paramount to surviving the
competition. SMEs can achieve this with a seamless link between InterVC and SupC to
boost productivity. Next, InterVC negatively affects innovation capability (InC) in Ghana-
ian SMEs. This outcome contradicts existing theories on the relationship between InterVC
and InC [14,17]. Therefore, this could be explained by the fact that SMEs in Ghana have
minimal innovation capabilities. Again, it could signify the infancy of InterVC activities
in Ghanaian SMEs. Consequently, to promote creativity, innovation, and profitability of
SMEs in Ghana, InterVC activities should be designed to stimulate innovation.
Stakeholders as a group(s) of individuals with a keen interest in the operations of busi-
nesses have been proven to positively influence the successful operations of SMEs [27,30,32].
Consequently, our study finds stakeholder pressure (to ShP) improves SupC in Ghanaian
SMEs. This could be explained by the fact that these group(s) of individuals have both
monitory and non-monitory interests in the management of the SMEs, and this drives
management to make decisions that create overall value for the stakeholders. Decisions
motivated by stakeholder pressure could range from engagement in corporate social re-
sponsibility, engaging in environmentally friendly resource exploitation, to engaging in
SupC [27,33]. Further, we find that InC positively affects FpM in Ghanaian SMEs. Ra-
tionally, stakeholders expect higher performance from businesses, and therefore their
pressure on management would be directed towards increasing the performance of the
firm [28,30]. This provides support to the recent popularity of value co-creation glob-
ally [24,25]. Consequently, to drive creativity and productivity amongst SMEs in Ghana,
the role of stakeholder pressure is significant. Positive stakeholder engagements should be
encouraged to breed an innovative ecosystem.
The seamless planning and execution of information dissemination between parties
in a supply chain integration management (SupC) have proven to empirically impact
on a firm’s performance [19–21]. Similarly, our study finds SupC positively affects FpM
in Ghanaian SMEs. This proves that effective information sharing and decision support
promote SMEs’ performance in Ghana. Unlike previous practices of unilateral decision-
making by SME owners, current practices stimulate multiple party engagements [14,24].
Consequently, SMEs in Ghana can promote higher performance with a strategically planned
supply chain integration with parties like suppliers and distributors. Further, it was
witnessed that InC mediates the positive relationship between SupC and FpM in Ghanaian
SMEs. While the strength of the mediation is not strong, it could be explained by the
growing innovation diffusion in SMEs in Ghana [21]. On the other hand, it could also mean
that the specific SupC activities of SMEs in Ghana focuses less on innovation capability
building. Therefore, SMEs in Ghana can boost productivity with the optimal design of SupC
activities, which thrives on innovation. Likewise, SMEs can invest in new technologies,
methods, and processes to maximize the effect of SupC on FpM. Finally, ShP is found to
mediate the positive relationship between SupC and InterVC in Ghanaian SMEs. While
the initial strength of the relationship between SupC and InterVC is reduced with the
introduction of ShP as the mediating variable, it could explain the least involvement of
stakeholders in the decision-making process of SMEs in Ghana a decade ago [27]. Therefore,
government policies to stimulate positive stakeholder engagements should be initiated to
drive the development agenda of the country through SMEs.
6. Conclusions
The study assesses the supply chain integration, interfirm value co-creation, and firm
performance nexus in Ghanaian SMEs using the SEM model. The mediating effects of
innovation capability and stakeholder pressure are also estimated.
Interfirm value co-creation (InterVC) positively affects SMEs performance (FpM) in
Ghana. This suggests that SMEs are more opened to collaboration compared to previous
years. Practically, this could be linked to the educational background of the current breed
of SME CEOs in the country. InterVC positively affects supply chain integration (SupC)
in Ghanaian SMEs. Hypothetically, these activities share similarities, although they are
different. The similarity could explain this relationship. Further, the desire of SMEs to
save costs, provide efficient services, and improve productivity also accounts for this
relationship. Consequently, the current competitive nature of the Ghanaian SMEs industry
can be successfully maneuvered with the optimal design of InterVC and SupC activities.
On the other hand, InterVC negatively affects innovation capability (InC) in Ghanaian
SMEs. While this is not ideal, it also suggests the stage of InterVC practice in Ghanaian
SMEs. Further, this negative relationship could be because of the low innovation drive of
Ghanaian SMEs. Therefore, InterVC activities should be designed to stimulate innovation
within the SMEs.
The pressure exerted by various stakeholders (ShP) positively affects SupC in Ghana-
ian SMEs. This is because, like any other decision, largely stakeholders seeking optimal
usage of organizational resources could drive the engagement of SMEs in SupC activities.
This outcome signifies the age of stakeholder engagement in Ghanaian SMEs, unlike in
previous years. Therefore, stakeholder engagements in the Ghanaian business environ-
ment should be encouraged to drive other significant decisions like the sustainable use of
resources and corporate social responsibility. Similarly, ShP positively affects the perfor-
mance (FpM) of Ghanaian SMEs. Although stakeholders primarily care about the financial
welfare of businesses, the non-financial aspect of businesses can also be significantly af-
fected by ShP. Thus, both internal and external stakeholders are critical to the success of
SMEs in Ghana. Consequently, these engagements should be prioritized to create a suitable
SME ecosystem.
Innovation capability (InC), which involves the use of modern technologies, new
methods, new equipment, and procedures, affects SupC in Ghanaian SMEs. This is because
most SupC activities thrive on innovation and improved processes. Thus, the success or
the extent of SupC activities within SMEs depends on the state of innovation. Ghanaian
SMEs should invest in innovation to maximize the benefits of SupC. Therefore, the newly
instituted government policies to stimulate innovation diffusion in Ghanaian SMEs are
timely for the promotion of this agenda. Again, InC positively affects FpM in Ghanaian
SMEs. Improved processes, machines, and equipment drive firm performance. Therefore,
the state of technology development, the average level of education, and the age range of
Ghanaian SME CEOs provide the perfect platform for learning and diffusion of modern
technologies to improve productivity.
Supply chain integration (SupC) positively affects SMEs performance (FpM) in Ghana.
This is explained by the fact that SMEs seek avenues to reduce cost while improving
efficiency. The product and services of Ghanaian SMEs can be improved significantly with
SupC. Therefore, SMEs can create value, reduce lead-time, and maximize profitability with
the practice of SupC. Further, InC mediates the positive relationship between SupC and
FpM in Ghanaian SMEs. Nonetheless, this mediation is relatively weak because of the least
innovation diffusion in Ghanaian SMEs. Thus, this relationship can be strengthened with
investments in new methods, equipment, and processes. Finally, ShP mediates the positive
relationship between SupC and InterVC in Ghanaian SMEs. Therefore, stakeholders should
be considered integral to the decision-making process of Ghanaian SMEs. This should
replace the practice of unilateral decisions by most SME owners in the country. While
this study contributes significantly to the literature on supply chain integration, interfirm
value co-creation, and firm performance in Ghana, future studies should consider the
innovation capabilities of Ghanaian SMEs and the state of stakeholder involvement in
SMEs decision making.
7. Limitations
The study uses survey responses from only registered members of the Association
of Ghanaian Industries. Although this streamlines the study by focusing on formalized
SMEs in the country, the non-members’ inclusion presents a challenge. Therefore, future
studies can focus on non-members to compare the findings from our study. Again, future
studies can explore the effect of foreign direct investment on interfirm value co-creation.
This is useful because of the increasing number of foreign-owned SMEs in Ghana and
the perceived unfair competition from these businesses. The outcome of these studies
could trigger policy implications on how to promote collaboration between domestic and
foreign-owned businesses.
Author Contributions: Author H.T. provided supervision guidance. S.K.O. conceptualized and
designed the study. Author C.P.K.C. provided statistical and discussion support. Author I.A.M.
provided statistical and modeling support, and author R.K.B. provided proofreading support and
referencing support. All authors have read and agreed to the published version of the manuscript.
Funding: The National Social Science Foundation of China (14BGL024): Research on the open
innovation mechanism and promotional policy of small and medium-sized enterprises from the
perspective of Network Embeddedness. Senior talent project of Jiangsu University (08JDG055):
Disruptive innovation and construction of SMEs dynamic competitive advantage.
Informed Consent Statement: Written informed consent has been obtained from the patient(s) to
publish this paper if applicable.
Conflicts of Interest: The authors declare no conflict of interest.
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Sustainability 2021, 13, 2351. https://doi.org/10.3390/su13042351 https://www.mdpi.com/journal/sustainability

2. Literature Review and Hypothesis Development

2.1. Supply Chain Integration

2.2. Interfirm Value Co-Creation

gains [25]. Early studies paid considerable attention to business-to-customer platforms,

2.3. Firm Performance

2.4. Stakeholders Pressure

companies that consider shareholders or stakeholders (including them in the corporate

2.5. Innovation Capability

2.6. Hypothesis Development

Figure 1. Conceptual study model.

Empirically, financial and non-financial firm performance is evidenced to be influ-

3.2. Measurement of Constructs

Table 1. Questionnaire development and measurement constructs.

Constructs Elements Measures References

3.3. Theoretical Model Specification

InterVCi = β 0 + β a FpMi + ε i (3)

SupChaini = β 0 + β a FpMi + ε i (4)

SthPi = β 0 + β b SupChaini + ε i (6)

Table 2. Test of the mediated relationship between variables.

Model Predictors Mediator Criterion

Table 3. Response rate and characteristics.

Variables Frequency Percentage

Table 4. Reliability Test.

Variables Cronbach’s Alpha Composite Reliability

4.2. Reliability and Validity Tests

Table 5. Cross-loading factor and average variance extracted.

InterVC InC SupC ShP FpM

4.3. Hypothesis Testing

Figure 2. Estimation output of the model.

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