The study sought to examine the relationship between customer-employee exchange and
firm innovative behaviour (FIB). The mediation effect of customer knowledge management
in the relationship between customer-employee exchange and FIB was determined. Quantitative
data was collected using a structured questionnaire. We sampled 247 respondents from
Small and Medium Enterprises (SMEs) in Ghana using the simple random sampling technique.
The partial least squares structural equation modelling (PLS-SEM) was assessed using
the Smart-PLS. The findings of the study suggest that the variables representing customer-employee
exchange (solidarity, harmonization, and information exchange) have had an important
effect on FIB. Moreover, customer knowledge management is found to mediate relationships
between customer-employee exchange and firm innovative behaviour. The study recommends
that due to their limited resources compared to larger companies’ new ways of interactions
between SMEs and customers should be introduced and enhanced as that will help the
firms to improve their innovative behaviour.
