A model for measuring innovation capacity in small and medium sized enterprises: empirical evidence from the United Arab Emirates

Eseroghene Udjo, Shahira Osama Abdalla and Giovanna Bejjani

International Journal of Business Excellence, 2026, vol. 39, issue 4, 499-510

Abstract: The literature on innovation capacity is fraught with ambiguities. The innovation capacity of small and medium sized enterprises (SMEs) has a wide range of interpretations, making it a difficult construct to examine. The ambiguity is a challenge, and it shows that our current understanding of the topic is inadequate. Therefore, the study examines the dimensions of innovation capacity of SMEs in the United Arab Emirates (UAE). The objective is to explore what drives innovation and how it may support SMEs in the UAE to remain competitive. Drawing on insights from theoretical studies of innovation capacity, the research identifies seven innovation capacity dimensions and uses factor analytic technique to evaluate these dimensions for consistency with those presented in the literature. The analysis extends to the use of structural equation modelling (SEM) to assess how well the hypothesised model fits the data. The results demonstrate that our research model fits the data well.

Keywords: small and medium sized enterprises; SMEs; competitiveness; innovation dimension; creativity; innovation capacity; structural equation modelling; SEM; United Arab Emirates. (search for similar items in EconPapers)
Date: 2026
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