Driving financial performance in innovative SMEs: does gender matter?

Purpose – This study aims to explore the role of innovation in driving financial performance in innovative small and medium-sized enterprises (SMEs), distinguishing between female-led and non-female-led firms. It aims to examine which combination of R&D investment, qualified human capital and intellectual property rights contributes to higher profitability, and whether gender influences this relationship. Design/methodology/approach – Using fuzzy-set qualitative comparative analysis (fsQCA), the study analyses a sample of 2, 635 Italian innovative SMEs over a ten-year period (2013–2022). This approach allows for the identification of different innovation pathways that lead to high financial performance, considering both female-led and non-female-led SMEs. Findings – Results highlight that R&D and highly qualified teams are more critical predictors of profitability than legal protection mechanisms. While female-led SMEs exhibit higher levels of innovation-related resources, the study finds no substantial differences in the specific innovation strategies leading to financial success between female-led and non-female-led SMEs. Moreover, when access to and control over resources is equitable, the impact of innovative practices on profitability appears to be gender-neutral. Originality/value – This study contributes to the academic debate on innovation in SMEs. By integrating a gender perspective, it advances the understanding of innovation-driven financial performance in these firms and suggests a gender-neutral dimension of innovation. The findings provide empirical insights into the key innovation pathways for high-performing SMEs, offering valuable implications for managers and policymakers aiming to foster innovation, gender equality and competitiveness.