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.
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