EXPLORING THE LEADING DRIVERS OF FIRM COMPETITIVENESS: THE MEDIATING ROLE OF TECHNOLOGICAL INNOVATION

Abstract

This research examines that how economic policy efficiency, infrastructure development, and human capital affect firm competitiveness in Pakistan, with technological innovation as a mediating variable. Drawing on theories of endogenous growth and innovation diffusion, study mixes core economic constructs with innovation capability to assess firm-level performance in a transforming economy. Total 300 responses were collected from managerial -level employees across manufacturing & service industries via structured survey instrument. Using PLS-SEM, analysis confirms that all independent variables have a positive and significant effect upon firm competitiveness, both directly and indirectly through technological innovation. The findings underscore the strategic role of innovation in translating macroeconomic enablers into firm-level advantages. This study offers practical insights for policy makers and business leaders to boost competitiveness over targeted investments in innovation ecosystems. The novelty of this study lies in its integration of macroeconomic enablers with firm-level innovation adoption in context of a developing economy. It is among the first empirical studies in Pakistan to use PLS-SEM to explore mediation pathway across service and manufacturing sectors.