Linking transformational leadership and frugal innovation: the mediating role of tacit and explicit knowledge sharing

Purpose Given the important role of frugal innovation for firms in the developing and emerging countries, the purpose of this paper is to investigate the effect of transformational leadership (TL) on frugal innovation through the mediating roles of tacit and explicit knowledge sharing. Design/methodology/approach The paper used a quantitative research method and structural equation modeling to test the relationship among the latent factors based on a sample of 339 participants from 120 Vietnamese firms. Findings Findings reveal the significant impacts of TL on aspects of frugal innovation, namely, frugal functionality, frugal cost and frugal ecosystem. Moreover, the paper highlights the mediating roles of tacit and explicit knowledge sharing (KS) in the relationship between TL and frugal innovation in terms of frugal functionality and frugal cost. Research limitations/implications To bring a deeper understanding of the benefits and important role of knowledge resources, future research should investigate the potential mediating mechanisms of knowledge management processes in the relationship between specific leadership styles and frugal innovation. Practical implications The paper provides a valuable understanding and novel approach for managers and directors of firms in developing and emerging countries to improve their firms’ frugal innovation capability through leadership practice and knowledge resources. Originality/value This study contributes to bridging research gaps in the literature and advances the insights of how TL directly and indirectly fosters frugal innovation via mediating roles of tacit and explicit KS.