Dynamic capabilities facilitating innovative strategies in SMEs

Abstract

This paper is an empirical study exploring the effects of intellectual capital and Dynamic Capabilities (DC) on Innovative Performance (IP) of organisations. Data were collected from a survey of 100 Taiwan companies related to the electronic and Information Technology (IT) industries. Hypotheses were tested using hierarchical regression analysis. Results show that Structural Capital (SC) and Relationship Capital (RC) fully mediate the effects of Human Capital (HC) on IP. Moreover, DC have a direct effect on IP. Dynamic capabilities, on the other hand, enhance the positive effect of RC on IP. The implication of the study is that managers should build and cultivate the firm's dynamic capabilities, because of its significant main and moderating effects.