Technological capability and business success: The mediating role of innovation

Abstract

Innovation is the main key of competitive advantage and business success that can be represented by firm performance. Drawing on the literature review, we conduct a research model which technological capability not only influence firm performance but also impact capability innovation that in turn firm performance. The aim of the study is to investigate the influence of the technological capability to firm performance of SMEs who operating in Batu – Indonesia. Related to this research, hypothesis have been developed. A questionnaire was prepared for collecting data. In order to test hypothesis using Partial Least Square (PLS). Result indicated that technological capability not only a direct but also an indirect effect on firm performance through innovation.