Strengthening technological innovation capabilities in software SMEs via employees’ self-efficacy and collaborative culture: the mediating role of tacit knowledge seeking and the moderating role of employee trust

Tacit knowledge plays a crucial role in strengthening innovation capabilities, yet limited research has examined how individual and organizational factors foster this process in software SMEs. This study investigates the effects of employee self-efficacy (ESE) and collaborative culture (CC) on technological innovation capabilities (TIC), with willingness to seek tacit knowledge (WTSTK) as a mediator and employee trust (ET) as a moderator. Drawing on social cognitive theory (SCT), survey data were collected from 299 employees across 35 Pakistani software SMEs and analyzed using partial least squares structural equation modeling (PLS-SEM). The results reveal that self-efficacy and collaborative culture positively influence both tacit knowledge seeking and innovation capabilities, with tacit knowledge seeking partially mediating these relationships. However, employee trust did not significantly moderate the link between tacit knowledge seeking and innovation. By integrating individual, cultural, and relational factors, this study advances the understanding of knowledge processes in SMEs and offers practical insights for enhancing innovation capabilities in the software industry.