Modeling technological innovation capability as an engine of growth: Evidence from China's SMEs

Abstract

With the advent of knowledge economies, technological innovation has assumed a critical role in business growth. The purpose of this paper is thus to investigate the impact of technological innovation capability on the growth of Small and medium-sized enterprises (SMEs) by establishing conceptual framework, distinguishing driving factors from various innovation attributes, and testing empirical models. Based on a national sample of 110 SMEs, this study reveals interesting results. First, the imbalance is obviously among input, output, and basis of innovation. Second, several factors of innovation input have direct effect on business growth. Third, increasing innovation input is the main pattern of improving technological innovation capability. The findings provide important propositions for innovation capability and the growth of SMEs.