Examining SME performance: the role of innovation, R&D and internationalisation

SME capabilities have long been viewed as a means for firms to succeed in the marketplace. Within this paper, we develop the theoretical underpinnings for hypothesised relationships between SME capabilities (innovation, R&D activities and internationalisation) on two-distinct forms of SME performance (sales growth and profitability). Multiple regression analyses is used to test the proposed relationships using questionnaire data from 181 mid-western-based SMEs. Significant relationships were found among the innovation, R&D activities and internationalisation capabilities for both forms of performance. A discussion of the implications for these findings with respect to managerial practice and future research is provided.