Title: The effects of dynamic capabilities on international SMEs' performance

Authors: Shahab Sharfaei; Jeen Wei Ong; Adedapo Oluwaseyi Ojo

Addresses: Faculty of Business Administration, Prague University of Economics and Business, Czech Republic; Faculty of Management, Multimedia University, Cyberjaya, Malaysia; School of Business, University of New York in Prague, Czech Republic ' Faculty of Management, Multimedia University, Cyberjaya, Malaysia ' School of Strategy and Leadership, Faculty of Business and Law, Coventry University, William Morris Building, Coventry, CV1 5DL, England, UK

Abstract: Developing countries such as Iran face many challenges which can impact international small and medium-sized enterprises (SMEs) to a larger extent due to their limited resources and bargaining power. International SMEs are confronted by a number of challenges such as how to develop the dynamic capabilities needed to help them attain a high level of performance. By studying international SMEs, we investigate this matter by situating competitive advantage to mediate dynamic capabilities and firm performance. The partial least square technique was used to analyse the data which was collected through a self-administered survey. The survey was obtained from 166 SMEs in Iran. The findings suggest that dynamic capability does not have a significant impact on international SME performance. Moreover, competitive advantage does not mediate the relationship. This study offers recommendations to international SMEs on how to leverage comprehensive knowledge on dynamic capabilities and competitive advantage to enhance their performance in developing markets.

Keywords: dynamic capabilities; competitive advantage; firm performance; SMEs in Iran; international SMEs; differentiation advantage; cost advantage; developing markets; SME performance; small and medium-sized enterprises; SMEs.

DOI: 10.1504/IJGSB.2023.130321

International Journal of Globalisation and Small Business, 2023 Vol.13 No.3, pp.247 - 267

Received: 12 Nov 2021
Accepted: 14 Oct 2022
Published online: 17 Apr 2023 *