This paper aims to draw on the resource-based view (RBV) to examine the effect of transformational leadership (TL) on innovation and marketing performance

Purpose: This paper aims to empirically examine the structural relationship between innovation types, transformational leadership (TL), knowledge sharing (KS) and marketing performance (MP) in small- and medium-sized enterprise (SME) service firms. The paper further investigates the extent to which TL and KS influence the relationship between innovation and MP and how such an effect could be managed for SME development.Design/methodology/approach: Cross-sectional survey data are collected from 437 from SME service firms of an emerging economy with a fast-growing service sector. The quantitative methodologies were used in which partial least squares structural equation modeling with bootstrap procedures was adopted to test the hypotheses.Findings: The findings suggest that Innovations have a significant effect on MP, TL has a moderating effect on the relationship and whiles KS mediates between innovation and MP. The study’s results indicate that these effects are robust in the firm’s marketplace.Research limitations/implications: This study calls for future testing of the current framework in other economies and SME sectors such as manufacturing, which makes findings contextual.Practical implications: For SME to remain competitive, this study deepens the effect of innovation on performance and as such managers/owners should consider the vital role of TL and KS as a predictor of the relationship between innovation and MP.Social implications: The findings emphasize the critical role of KS and TL in the relationship between innovation types and MP SMEs in an emerging economy.Originality/value: This current study contributes to the literature by assessing a valid model that describes concurrently the relationships between innovation types, TL, KS and MP. This is the first empirical study to focus on SME MP in relation to types of innovation, TL and KS in an emerging economy.