The influence of dynamic capabilities on performance of small and medium firms: The case of thai SMEs

Abstract

Traditional research demonstrates that enhancing capabilities enables firms to gain a competitive advantage while also improving performance. Nevertheless, none of them places a strong emphasis on dynamic capabilities, and small and medium-sized enterprises (SMEs) especially in the South East Asia region have not been studied extensively in this area. As such, this paper will examine the impact of dynamic capabilities (innovative capability, absorptive capability and adaptive capability) on the performance of SMEs. The responses of 322 SMEs in Thailand were analyzed quantitatively using simple regressions. The findings indicated that all of them have a significant positive impact on the performance of SMEs. However, SMEs should prioritize innovative capability by investing and paying more attention to innovation and creativity, and then followed by the adaptation and absorption abilities of firms. © 2021, Allied Business Academies. All rights reserved.