SMEs' dynamic capabilities and value creation: the mediating role of competitive strategy

Purpose The purpose of this research is to explicate the role of dynamic capabilities in the ability of small- and medium-sized enterprises (SMEs) to create value and also investigate the relationship among different dynamic capabilities, competitive strategy and SMEs' value sources. Design/methodology/approach Empirical evidence based on a survey conducted on a sample of 441 UK-based SMEs was used to test the research hypotheses. Findings The findings illustrate that sensing, learning, integrating and coordinating capabilities play a significant role in SMEs' value creation, and competitive strategy mediates the impact of dynamic capabilities on value creation. Originality/value While much of the prior studies have conceptually/qualitatively investigated the financial return of uni-dimensional dynamic capabilities of large firms in the manufacturing sector, this study made a significant effort to quantitatively examine the non-financial value potential of SMEs in service sector through four processes of dynamic capabilities.