RESEARCH PROPOSAL ON DANAMIC CAPABILITES AND PROD

The focus of this study was to analyze empirically the mediating role of innovation capabilities and open innovation on the relationship between a SME’s customer orientation and innovative performance. To test the posited hypotheses, a cross-sectional field survey quantitative approach was used. Based on the empirical data of 311 SMEs operating in study area, the study was employed structural equation modeling (SEM) to analyze the data and research hypotheses in the proposed structural regression model. The SEM analysis revealed that the higher-level strategic orientation of small and medium enterprise is the higher innovative performance. Finally, the results indicated that innovation capabilities and open innovation mediated the path between customer orientation and innovative performance. Moreover, the study indicated that customer orientation create value through innovation capabilities and open innovation, thus have an indirect impact on SMEs innovative performance.