A multidimensional analysis of the effects of innovation on the competitive advantage of small and medium-sized enterprises

Abstract

This paper investigates the effects of different dimensions of innovation on the competitive advantage of small and medium-sized enterprises (SMEs). The main dimensions of the innovation retained in this study are related to different types of innovation, innovation activities, sources of internal and external information, and public support for innovation. In this study, we rely on the principal component analysis of innovation applied to a sample of 231 Tunisian SMEs. The results show that product innovation, organizational innovation and innovation activities were the key variables for enhancing the competitive advantage of SMEs. In contrast, external sources of information have no effects on the SMEs competitive advantage. The originality of this research is to provide a multidimensional framework of the effects of innovation on the competitive position of SMEs.