DETERMINANTS OF COMPETITIVE ADVANTAGE FOR SMALL AND MEDIUM ENTERPRISES IN DEVELOPING ECONOMIES:CAPABILITIES-BASED PERSPECTIVE

Abstract

S
mal
l and medium enterprises (SMEs)
in developing economies
nowadays
experience
s
strong competitions
both locally and at the global markets
.
Consequently,
Hall and
Wagner,
(2012)
demonstrated the needs for an
analysis of specific s
trategic
capabilities required for
sustainable
development of small businesses
. Despite the interest stimulated by the works of
numerous scholars
(Ma, 2004,
Teece, 1992)
, there have been limited researches that
attempted to examine and
demonstrated the factors influencing competitive advantage of
SMEs i
n developing economies
.
Devlin and
Ennew, (1997)
advocated t
hat market driven
competition arena and source of competitive advantage are easily recogniza
ble for particular
market
.
Th
is study concep
tualized six capabilities as strategic capabilities
which can
efficiently enhance
SMEs
competitive advantage at local an
d international markets. The
results from the comfirmatory factor analysis through Cronbach’s alpha demonstrated the
reliability of
the
items measuring; innovation capability, learning capability, managemnt
capability, marketing capability, relational capa
bility and technological capability as
determinants of SMEs competitive advantage in developing economies.