Purpose – The purpose of this study is to propose a research framework to understand the role of innovation in business performance with a focus on inter-organizational learning influence. Thus, it is important to determine the methodology that will be applied to achieve the research objectives, explain the way in which the variables will be measured, and present the research design including data analysis technique. Furthermore, the suitable choices of procedures and methods are essential to improve the reliability and validity of the study results. Materials and Methods - The industry wide survey had a sample size of 403 (76 public clients, 49 engineering and design consultants, 68 construction management consultants and 210 contractors). Data analysis was done by SPSS 20 and SPSS AMOS 20, through structural equation modelling of 58 construction organizations of Islamabad, Lahore and Karachi. Findings - The results were significant and all the hypotheses were accepted. Moreover, they showed that inter-organizational learning drives innovation that ultimately increases the performance of the organization. Research Limitations – The study was limited to three cities of Pakistan including Lahore, Karachi and Islamabad. Practical Implications –A significant implication for business practitioners and researchers is the knowledge regarding the significance of inter-organizational learning for the improvement of construction industry of Pakistan. It was also specific to construction industry.
