Small Business Economics

, Volume 41, Issue 3, pp 581–607 | Cite as

Disentangling the effects of organizational capabilities, innovation and firm size on SME sales growth

  • Lorraine M. UhlanerEmail author
  • André van Stel
  • Valérie Duplat
  • Haibo Zhou


This paper focuses on certain drivers of SME sales growth related to knowledge and innovation. Building on the dynamic capabilities literature, we test whether two organizational capabilities (external sourcing and employee involvement in renewal activities) predict sales growth, and if so, whether such effects are mediated by process and/or product innovation. Based on survey data from a panel study of Dutch SMEs, and controlling for several firm characteristics (firm size, sector, age and family business), we conclude that external sourcing has direct effects on both product and process innovation, with an indirect effect (mediated by process innovation) on sales growth. In line with our hypothesis development, we also find that employee involvement, while positively affecting process innovation, has a negative effect on sales growth. Firm size moderates the effects of two of the variables (external sourcing and product innovation) on sales growth, with more positive effects found for the smallest firms, results supporting the nimbleness (versus resource-based) view.


SMEs Sales growth Dynamic capabilities Innovation Knowledge Empirical study Lead-lag effect 

JEL Classifications

D22 D83 L25 O31 



The present paper has gone through many iterations. The authors would like to thank Mickey Folkeringa and Joris Meijaard for their contributions to earlier versions of the paper. The research has been supported by the framework of the research program SCALES, carried out by Panteia/EIM and financed by the Dutch Ministry of Economic Affairs, Agriculture and Innovation.


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Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  • Lorraine M. Uhlaner
    • 1
    Email author
  • André van Stel
    • 2
  • Valérie Duplat
    • 1
  • Haibo Zhou
    • 3
  1. 1.EDHEC Business SchoolRoubaixFrance
  2. 2.Panteia/EIMZoetermeerThe Netherlands
  3. 3.Department of Innovation Management and StrategyUniversity of GroningenGroningenThe Netherlands

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