Affiliations: [a] College of Economics & Management, Beijing University of Technology, Beijing, China
| [b] School of Economics & Management, University of Science and Technology Beijing, Beijing, China
| [c] Faculty of Management Sciences, International Islamic University Islamabad, Islamabad, Pakistan
Correspondence:
[*]
Corresponding auhtor: Li Shuangjie, College of Economics and Management, Beijing University of Technology,
China. E-mail: lishuangjie2000@sohu.com.
Abstract: Multiple tangible and intangible determinants affect the survival and success of a small and medium enterprise (SME). In turbulent markets, however, compared to exogenous effects, a firm’s internal capabilities are seen as major sources of economic value creation and sustainable competitive advantage. This study empirically examines the effects of pivotal internal capabilities, namely entrepreneurial orientation, information technology (IT) capability, and intellectual capital (IC), on the financial and non-financial performance of SMEs that operate in the emerging market of Pakistan. Data were collected through self-reported questionnaires, from a sample size of 307 SMEs. The study hypotheses were tested through the structural equation modelling (SEM) technique of AMOS 21. The statistical results show entrepreneurial orientation, IT capability and intellectual capital as significant contributors to both financial and non-financial performance. Despite its limitations, the study offers both future-research directions and policymaking recommendations for practice. Namely each SME ought to focus on self-developing those internal capabilities that render sustainable its competitive posture.
Keywords: Entrepreneurial orientation, IT capabilities, intellectual capital, firm performance
