A Structural Equation Modeling Approach to Evaluating Innovation Dynamics' Effect on SME Performance in the United Arab Emirates

A Structural Equation Modeling Approach to Evaluating Innovation Dynamics' Effect on SME Performance in the United Arab Emirates | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article A Structural Equation Modeling Approach to Evaluating Innovation Dynamics' Effect on SME Performance in the United Arab Emirates Sara Ismail Almansoori, Zehra Canan Araci, Fikri Dweiri This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-5307180/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 12 You are reading this latest preprint version Abstract It is essential to comprehend the function of innovative capabilities in the SME-driven landscape. Despite the significance of SMEs, it is unclear how innovation capabilities affect their success, which is why this study was conducted as part of an investigation. The goal of this study is to investigate the intricate interactions that exist between innovation capacities and the performance of SMEs in the United Arab Emirates. Data from 255 SME industry experts in the UAE were evaluated using SEM-Amos, and the results showed that organizational innovation, employee engagement, culture, and innovation capability all had a major impact on performance. According to the report, innovative considerations have a major impact on SME success in the United Arab Emirates, providing valuable strategic insights. These results serve as a guidance for company executives and politicians in creating an atmosphere that supports the nation's continued SME growth and economic prosperity. Innovation capabilities SME performance UAE SEM-AMOS Innovation culture Figures Figure 1 Figure 2 Figure 3 1. INTRODUCTION Small and Medium Enterprises (SMEs) play a vital role in the world economy, which makes a substantial contribution to GDP and jobs in many nations. Notwithstanding differences in terminology, SMEs are typically distinguished from large corporations by having fewer employees, fewer resources, and lower turnover rates (Naradda et al., 2020; Ma and Cheok, 2022 ). The attainment of organizational goals through the utilization of material, financial, and capital resources is critical to its success, and the contentment of resource suppliers is contingent upon returns relative to other available options (Qader et al., 2022 ). Profit creation is still the main indicator of success, highlighting its increasing significance in improving organizational performance. For companies to adjust to changing market demands, innovation is a vital tactic. Innovation is recognized by Lukito-Budi et al. ( 2023 ) as a necessary component of successful firms because it fosters long-term growth and success and improves organizational performance (Utomo et al., 2023 ). By gauging innovativeness, SME innovation culture, and the quantity of innovations put into practice, this study defines innovation. Even though innovation is essential to SMEs' success, emerging nations like the United Arab Emirates have a research deficit in this area. This study aims to explore the relationship between SME performance metrics, behavior, innovativeness, and innovation skills. This work is especially significant because innovation research is a dynamic field. Empirical research on the effect of innovation on SME success has generated mixed results despite a great deal of interest, which calls for more study (Liu et al., 2022 ). Furthermore, nothing has been written about little developing countries like the United Arab Emirates, where SMEs are vital to the country's economy. The study addresses the need for empirical research in this context by evaluating important factors impacting the innovative capabilities of UAE SMEs and their influence on performance. Increased innovation is required in organizational settings, especially in the Middle East, due to the surge in demand for goods and services and the shorter product lifecycles (Blaique et al., 2023 ). Although earlier research has focused on the operational skills related to service innovation, innovation capability in Middle Eastern organizational contexts—including the United Arab Emirates—has received little attention (Alosani et al., 2021 ). In order to close this gap, this study examines how innovation affects corporate culture in UAE SMEs and organizational performance. This aligns with the strategy focus on knowledge-driven growth of UAE Vision 2021. In order to help SMEs understand the impact of innovation capabilities on organizational performance and to help them align their strategies with the necessity of fostering innovation in the face of competition, the study aims to develop and empirically validate an organizational innovation model for SMEs in the United Arab Emirates. The study delineates the essential aspects of innovation in Section 2, presenting the notion of "innovation capability" and investigating the performance dimensions of SMEs in conjunction with conjectures concerning the impact of "innovation capability" on SMEs performance. In Section 3, the research methodology is outlined, followed by the data analysis phases and the accompanying results. The conclusions of the structural model's testing, validity, and reliability are covered in detail in the section that follows. In conclusion, the report offers insights, policy consequences, and future research directions. 2. The Conceptual Framework and Basis of Innovation Dynamics Innovation capacity, which measures how innovative a company is, is a complex idea with many facets (Ganguly et al., 2019 , Saunila., 2020; Purwanto, 2020 ). Open communication, taking risks, and a dedication to continuous development are all components of a strong innovation culture, which is comprised of shared beliefs and behaviors that promote innovation (Fuad et al, 2022 ; Arsawan et al, 2022 ). Support from the top down, resources available for trial, and acknowledgment of creative efforts are all necessary for cultivation (Sotarauta and Suvinen, 2021 ). In order to get a competitive edge, an organization must innovate by introducing new procedures, frameworks, or methods that are connected to efficient resource utilization (Abbas et al, 2020 ). According to research, organizational innovation and business success are positively correlated (Chen et al., 2021 ), and this requires strong leadership, a supportive workplace culture, and a well-defined innovation plan (Lukito-Budi et al., 2023 ). Innovation is greatly encouraged by employee engagement, which is characterized by emotional commitment and a readiness to go above and beyond the call of duty (Na-Nan et al., 2020 ). Studies have shown that there is a substantial correlation between employee engagement and the results of innovation, and that engaged employees actively contribute new ideas (Kwon and Kim, 2020 ). Investigating many aspects of innovation is essential in order to demonstrate a direct correlation between overall innovation and company performance. According to Tidd and Bessant ( 2020 ), earlier research has categorized innovation into several categories, including process and product innovation, marketing innovation, and organizational innovation. SME performance is a complex concept that measures the achievements and success of a business. This study looks at three aspects: financial performance, operational performance, and product quality. It acknowledges the importance of varied performance measurements (Battesini et al., 2021 ). Both intrinsic and extrinsic qualities are included in product quality, internal operational productivity and efficiency are assessed by operational performance, and sales growth, profitability, net profit margin, financial outcomes, and cash flow are closely examined by financial performance. It is important to note that there is no globally accepted definition for product quality, which is a complex and multidimensional issue (Alzoubi et al., 2022 ). Operational performance, which is frequently a composite metric, represents the internal operation performance of a business in terms of productivity, efficiency, and quality of its processes and products. In order to ensure consistency and robustness of results, operational performance measurement items are derived from well-established instruments used in previous studies (Al-Hakimi et al., 2023 ). Reaching financial and market share goals is the definition of financial performance. Drawing on well-established studies for measurement, this study takes into account a number of financial indicators, including corporate sales growth, profitability, net profit margin, financial outcomes, and cash flow (Ahinful et al, 2023 ; Singh and Rastogi, 2023 ). After analyzing earlier studies, we have determined that organizational culture, technology utilization, and managerial support are the three main elements impacting innovation in firms. Even though it is acknowledged that innovation affects SME success, the literature that has already been written has serious flaws. First of all, there are conflicting theories since the word "capacity for innovation" lacks a precise and uniform meaning. Many research ignore more comprehensive innovation models in favor of a restricted focus on product innovation. Second, research frequently assesses business innovation capacity, offering scant information. Finally, the organizational culture component of innovation is ambiguous due to its collaborative character. We investigate an organization's capability for innovation via the viewpoints of its employees in an effort to close these disparities. In the context of a developing nation, we particularly look into how organizational culture and information flow affect creative capacity. This study makes a contribution by emphasizing the critical role that informal relationships play in encouraging information sharing and by offering a socio-structural approach. The proposed paradigm, presented in Fig. 1 , clarifies the conceptualization of innovation ability. The methodology, survey findings, and constraints are covered in the framework, which focuses on two important dimensions: the degree and scope of innovation. By using this model, we hope to make sense of the intricacies found in the literature and offer a thorough grasp of innovation capability. The synergy between innovation and the performance of SMEs holds immense importance. The following hypotheses aim to elucidate the significance of these dimensions in shaping the success of SMEs in this dynamic economic milieu. H1: There is a significant relationship between Innovation Capability and the performance of UAE SMEs. H2: Innovation Culture holds significance in relation to the performance of UAE SMEs. H3: The performance of UAE SMEs is significantly influenced by Organizational Innovation. H4. Employee Engagement (EE) has substantial effect on the performance of UAE SMEs The measurement items for the study constructs are presented in Table 1 . Table 1 Codes and Measurement Items for Study Constructs Item code Item definition Refrences Innovation Capability (IC) IC1 Organization actively encourages and supports employees to generate innovative ideas. (Ganguly et al, 2019 , Saunila., 2020; Purwanto, 2020 , Fuad et al, 2022 ; Arsawan et al, 2022 , Migdadi, 2022 ) IC2 A culture of innovation is embraced throughout the organization.. IC3 Resources (e.g., budget, time, talent) are effectively allocated to support innovation initiatives. IC4 Collaboration with external partners or organizations is undertaken to drive innovation. IC5 Risks associated with innovative projects are managed effectively. IC6 Competitiveness in the market is enhanced by innovation capability within the organization. IC7 Remaining well-informed about market trends, customer needs, and competitors is essential for guiding innovation. IC8 Customers and end-users are actively involved in the innovation process (e.g., through feedback). Innovation Culture (InC) InC 1 Top leadership actively supports and promotes innovation within SME. (Fuad et al, 2022 ; Hanifah et al, 2019 , Arsawan et al, 2022 , Naveed et al, 2022 , Srisathan et al, 2020 , Arsawan et al, 2022 , Scaliza et al, 2022 ) InC 2 Open and transparent communication about new ideas is encouraged by the organization. InC 3 Employees are empowered to take ownership of their innovative initiatives. InC 4 Sufficient resources (budget, time, talent) are allocated to support innovative projects. InC 5 A culture of risk tolerance is fostered within SME, encouraging employees to take calculated risks in pursuit of innovation. InC 6 Well-defined innovation processes or stages that guide idea development and implementation are in place within organization. InC 7 Recognition and rewards are given to individuals and teams for their contributions to innovation. InC 8 Employees feel that their innovative efforts contribute to the overall success and growth of SME. Organizational Innovation (OI) OI1 New technologies and tools are actively sought and adopted by SME to improve processes and operations. (Tidd and Bessant, 2020 , Abbas et al, 2020 , Chen et al, 2021 , Lukito-Budi et al, 2023 , Abdul-Halim et al, 2019 ) OI2 Employees are encouraged and empowered to propose and implement changes to improve workflow. OI3 A well-defined process for evaluating and implementing innovative ideas within the organization is in place. OI4 Investments in training and development are made by SME to enhance employees' skills and knowledge related to innovation. OI5 A culture of open communication, encouraging the sharing of innovative ideas and feedback, is fostered by organization. OI6 Feedback from customers and stakeholders is actively sought by organization to drive product or service improvements. OI7 Innovative changes that have positively impacted competitiveness have been successfully implemented by SME. OI8 Employees believe that their innovative contributions are recognized and valued within the organization. Employee Engagement (EE) EE1 Employees in my organization actively participate in innovation initiatives. (Na-Nan et al, 2020 , Kwon and Kim, 2020 , Ghani et al, 2019 , Kang et al, 2021 , Hinzmann et al, 2019 ) EE2 The organization fosters a culture that encourages employees to share innovative ideas. EE3 Employee engagement positively influences the organization's innovation capability. EE4 Engaged employees feel empowered to take ownership of their work and contribute to innovation efforts. EE5 Employee engagement enhances collaboration among employees, leading to better problem-solving. EE6 Engaged employees actively seek solutions to challenges, driving organizational innovation. EE7 Employee engagement positively impacts the organization's overall performance. EE8 Engaged employees are customer-focused, leading to improved customer experiences. EE9 The organization recognizes and rewards employee contributions to innovation and performance. EE10 Employee engagement plays a vital role in the success of SMEs in the dynamic UAE business landscape. SMEs’ Performance (SP) SP1 Applying innovation capabilities enhances the efficiency of SME's operations. (Utomo et al., 2023 , Qader et al., 2022 ,Naradda et al., 2020; Chen et al, 2021 ) Ma and Cheok, 2022 , Al-Hakimi et al., 2023 , Liu et al., 2022 ,Battesini et al., 2021 , SP2 Improvements in the SME's ability to adapt to market changes have been realized through innovation capabilities. SP3 Innovation capabilities have contributed to providing better value to customers. SP4 Increased competitiveness of SME is attributed to the application of innovation capabilities. SP5 The application of innovation capabilities has positively impacted SME's talent attraction and retention. SP6 The improvement in non-financial performance of SME is a direct result of the adoption of innovation capabilities. SP7 Innovation capabilities have contributed to SME's financial performance, such as increased profitability. SP8 Applying innovation capabilities has positively influenced SME's overall business growth. SP9 Enhancements to SME's reputation and brand value have been achieved through the implementation of innovation capabilities. SP10 The application of innovation capabilities contributes to the nation's economic growth and development. 3. Methodology This study uses a thorough method to gathering data, starting with a review of the literature to determine the key variables affecting innovation skills and how they affect SMEs. After that, data was gathered using a standardized questionnaire that included 44 factors found in the literature. A pilot study that used a strictly quantitative research approach used a survey tool. The questionnaires for the research tools were developed using a five-point Likert scale. The Likert scale was judged appropriate given the use of SEM-AMOS for data analysis, particularly for queries pertaining to unobserved data and prospective attitudes or perceptions, as suggested by Purwanto (2023). Methods of deliberate and systematic sampling were used to evaluate how important aspects of SMEs' innovation capacities affected them. Professionals conducted the last survey rounds in order to identify the key variables that significantly influence an individual's capacity for invention. After data screening, 255 valid responses were obtained via the distribution of structured questionnaires to SME Owners/Entrepreneurs, SME Managers and Executives, Innovation Managers, and Employees Involved in Innovation. A variety of viewpoints on the dynamics pertaining to innovation in SMEs are provided by the respondents' dispersion across professional positions. 33.33% of the respondents were employees involved in innovation, the largest segment. Of the respondents, 21.18% were SME Owners/Entrepreneurs, 23.92% were SME Managers and Executives, and 21.57% were Innovation Managers/Officers. This comprehensive representation ensures a holistic view of innovation processes, considering both leadership and employee perspectives. Examining the professional experience of respondents provides insights into the depth of expertise contributing to the study. A substantial portion, accounting for 35.2%, reported having more than 16 years of experience. Additionally, 26.4% had 11–15 years of experience, 22% had 6–10 years, and 16.4% had 1–5 years of experience. This diverse range ensures that insights are derived from individuals with varying levels of familiarity with innovation processes, providing a nuanced understanding. The academic qualifications of respondents underscore the educational diversity within the sample. The majority (61.18%) holds a Bachelor's degree, indicating a strong foundational understanding. Furthermore, 22.35% have a Master's degree, while 12.94% possess a PhD. A smaller percentage holds a Diploma (2.35%), and 1.18% indicated other qualifications. This diversity enriches the study by incorporating insights from individuals with different levels of academic training. Figure 2 illustrates a systematic, sequential process used to analyze and evaluate the theoretical model employing AMOS-SEM. The model evaluation process involves several key steps, as depicted in Fig. 2 . Firstly, the screened data is input into SEM-AMOS. Secondly, the SEM-AMOS software is executed to simulate the model. Thirdly, Confirmatory Factor Analysis (CFA) is employed to assess the measurement model. Fourthly, the theoretical model undergoes testing and is modified as necessary. Fifthly, the Structural Model is evaluated. Finally, the sixth step entails hypothesis testing to validate the model's predictions and relationships. 4. DATA ANALYSIS Throughout this investigation, the assumptions of normality were evaluated both at the univariate and multivariate levels. The normality examination involved a meticulous analysis of skewness and kurtosis for the measured variables, and the findings consistently fell within the acceptable range of -1 to + 1, as recommended by [38]. Additionally, the presence of multicollinearity, indicating potential associations among two or more variables leading to redundant response information, was thoroughly assessed. VIF were employed for multicollinearity assessment, with VIF values falling between 1.026 and 1.289, and tolerance values ranging from 0.73 to 0.965. These results affirm that the data analysis encountered no complications associated with multicollinearity. The study's constructs, encompassing IC with 7 factors, InC with 8 factors, OI with 8 factors, EE with 10 factors, and SP with 10 factors, underwent CFA to evaluate the measurement model. The CFA model exhibited a commendable fit, as indicated by fitness metrics detailed in Table 2 . Key indices such as the Tucker-Lewis Index (TLI) and Comparative Fit Index (CFI) surpassed 0.90, the Normed Fit Index (NFI) exceeded 0.80, and the Root Mean Square Error of Approximation (RMSEA) remained below 0.08. The final CFA fitness indicators were compared with the predefined values for each fit index in the measurement model, as outlined in Table 2 . Table 2 Simultaneous fitness rates for CFA (Measurement Model) Name of Index Acceptance Level Index Value Comments Chisq/df Chisq/df ≤ 3 1.614 fulfilled TLI TLI ≥ 0.9 means satisfactory 0.905 fulfilled CFI CFI ≥ 0.9 means satisfactory fit. 0.912 fulfilled NFI NFI ≥ 0.80 suggests a good fit 0.810 fulfilled GFI GFI ≥ 0.80 suggests a good fit. 0.804 fulfilled RMSEA RMSEA ≤ 0.08 mediocre fit. 0.047 fulfilled In this investigation, the validity of the study constructs is scrutinized through an examination of convergent validity, discrimination validity, and their interrelations with other structural constructs. Acceptable convergent validity is implied when the Average Extracted Variance (AVE) is 0.5 or higher (Rönkkö and Cho, 2022 ). The determination of discriminative validity involves confirming that the AVE exceeds the square of the correlation coefficient between the constructs, signifying readiness for the subsequent analysis in the structural model phase. Additionally, the reliability is assessed through internal reliability (Cronbach alpha > = 0.70) and construct reliability (CR > = 0.70) in this study. Table 3 provides insights into the reliability, AVE, and Constructs Reliability of the measuring model, while Table 4 presents the details of discrimination validity. Table 3 CFA results for all structures Group/ Construct Influential Factors Factor Loading CR (≥ 0.6) AVE (≥ 0.5) IC IC1 IC2 IC3 IC4 IC5 IC6 IC7 IC8 0.632 0.744 0.803 0.816 0.857 0.838 0.870 0.839 0.73 0.62 InC InC1 InC2 InC3 InC4 InC5 InC6 InC7 InC8 0.726 0.687 0.713 0.723 0.791 0.815 0.857 0.836 0.81 0.74 OI OI1 OI2 OI3 OI4 OI5 OI6 OI7 OI8 0.857 0.638 0.712 0.629 0.820 0.847 0.720 0.713 0.76 0.68 EE EE1 EE2 EE3 EE4 EE5 EE6 EE7 EE8 EE9 EE10 0.708 0.860 0.884 0.667 0.671 0.803 0.637 0.891 0.816 0.857 0.73 0.66 SP SP1 SP2 SP3 SP4 SP5 SP6 SP7 SP8 SP9 SP10 0.785 0.892 0.771 0.779 0.794 0.770 0.621 0.785 0.666 0.982 0.84 0.69 Table 4 displays the diagonal (bold) values, indicating the square root of the AVE, while the remaining values denote the corresponding structural elements. The attainment of discrimination is confirmed when a diagonal value surpasses the values in both its column and row [29]. Table 4 Discriminant validity Constructs IC InC OI EE SP IC (0.635) InC 0.122 (0.787) OI 0.291 0.295 (0.734) EE 0.271 0.098 0.218 (0.724) SP 0.274 0.287 0.219 0.272 (0.711) The convergent validity of all constructs in this study has been satisfactorily established. With the positive outcomes in terms of reliability and validity, the study can confidently progress to the subsequent stage of multivariate analysis. Consequently, the subsequent sections present the analysis conducted on structural equation modeling in this research. 4.1 Structural equation modeling Analysis The subsequent phase in the analytical model process Upon confirming the uni-dimensionality, reliability, and validity of the research constructs, the subsequent analytical phase involves integrating all constructs into a comprehensive structural equation model (SEM) utilizing the Analysis of Moment Structure (AMOS). The research assessment framework's exogenous and endogenous variables are systematically organized, commencing with the exogenous variables – IC, InC, OI, and EE – and concluding with the endogenous variable, SP. This structural arrangement is visually represented in Fig. 3 , where each construct is interconnected by arrows indicating the hypothesized directional relationships. However, the model extends beyond merely testing individual hypotheses, as it serves as a tool to scrutinize the multidirectional relationships within the entire array of research constructs. To evaluate the structural measurement models, a set of fitness indices is employed and presented in Table 5 . These indices serve as a critical gauge of the model's goodness-of-fit. Importantly, the results indicate that the model has achieved an acceptable level of goodness-of-fit, substantiating the model's capability to accurately represent the complex interplay among the research constructs. Table 5 structural model Fitness indices Index Acceptance Level Index Value Comments Chisq/df Chisq/df ≤ 3 1.468 fulfilled TLI TLI ≥ 0.9 0.920 fulfilled CFI CFI ≥ 0.9 0.927 fulfilled NFI NFI ≥ 0.80 0.804 fulfilled GFI GFI ≥ 0.80 0.820 fulfilled RMSEA RMSEA ≤ 0.08. 0.042 fulfilled 5 Discussion on Research Findings The structural model demonstrates a satisfactory fit to the established fitness requirements, meeting the acceptable level of fitness indexes as outlined by Awang (2015) and Hair et al. (2011). The standardized regression coefficients for all research constructs within the final structural measurement model are presented in the path diagram, providing insights into the causal effects and impacts of multiple constructs. The fitness indexes, crucial for assessing the alignment of the hypothesized model with the available data, were observed to be within acceptable levels. These indexes serve as indicators of the model's adequacy and coherence with the empirical data (Awang, 2015). The standardized regression weights, representing the estimated beta coefficients, offer a quantitative measure of the influences exerted by both exogenous and endogenous variables. Figure 3 illustrates the output, showcasing standardized regression coefficients with an R² value of 0.72. The Analysis Moment of Structures (AMOS) was employed for structural equation modeling, generating standardized regression weights and unstandardized regression weights for path analysis. In this analysis, the standardized regression weights were prioritized due to their interpretability, aligning with the recommendation of Do-Thi and Do, ( 2022 ). The criteria for evaluating the structural model encompass squared multiple correlations (R²) and path coefficients (β) for each path classifications, an R² value of 0.72 for the endogenous latent variable (SP) indicates substantial explanatory power. This suggests that the developed model effectively elucidates the relationships among the constructs within the research framework. Testing the research hypotheses, the results presented in Table 6 offer a detailed examination of the standardized regression weights and their significance for each pathway within the structural model. Table 6 Standard Weight Regression and significance level of study constructs. Path p-value Beta coefficient Status SP <--- IC . 001 0.43 Supported SP <--- InC .000 0.65 Supported SP <--- IO .001 0.32 Supported SP <--- EE . 024 0.28 Supported These standardized regression weights signify the strength and direction of the connections between the exogenous variables (IC, InC, OI, EE) and the endogenous variable, SP. The statistical significance of each path is evaluated based on the corresponding p-value, with a lower p-value indicating stronger evidence against the null hypothesis. Starting with the path from IC to SP, the substantial beta coefficient of 0.43 and a low p-value of 0.001 support the hypothesis that higher levels of IC positively impact SMEs’ performance. Moving on to the relationship between InC and SP, the highly significant and positive association is evident with a substantial beta coefficient of 0.65 and an extremely low p-value of 0.000. This robustly supports the idea that a conducive innovation culture positively influences SMEs’ performance. Considering the path from OI to SP, a significant positive relationship is revealed, supported by a beta coefficient of 0.32 and a p-value of 0.001. This provides evidence in favor of the hypothesis that higher levels of Organizational Innovation contribute positively to SMEs’ performance. Examining the pathway from EE to SP, a significant positive connection is observed, characterized by a beta coefficient of 0.28 and a p-value of 0.024. This confirms the hypothesis that increased levels of Employee Engagement positively impact SMEs’ performance. In summary, the statistical significance of all paths within the structural model substantiates the proposed relationships between the examined constructs. The beta coefficients offer insights into the strength of these relationships, emphasizing the importance of factors such as Innovation Capability, Innovation Culture, Organizational Innovation, and Employee Engagement in influencing the performance of UAE SMEs. 5. Study Contribution This section outlines the significant contributions of the study to the existing body of knowledge. By exploring the interplay between innovation capabilities and SME performance, the research makes noteworthy theoretical advancements. Additionally, it provides practical insights and policy implications, contributing to the enhancement of the SMEs sector. 6.1 Theoretical contribution This research offers a sophisticated understanding of the connection between innovation skills and SME success, which significantly advances the body of theoretical information already in existence. The research offers insights into the precise mechanisms through which innovation skills impact SME outcomes, while also improving and expanding upon current theoretical frameworks. The research advances the creation of a more thorough and contextually appropriate theoretical framework by exploring the nuances of innovation processes within the SME setting. The study's conceptual models and frameworks are useful resources for academics and professionals who want to investigate and comprehend the dynamics of innovation capacities in the SME sector. 6.2 Policy Implications and Practical Contribution The study's conclusions have significant ramifications for the formulation of policies and real-world implementations for SMEs. The research reveals the complex relationship between innovation skills and SME performance, giving policymakers evidence-based guidance to develop successful programs that encourage innovation in SMEs. The report also provides useful advice for entrepreneurs and managers of SMEs, including doable actions to boost innovation capacities and, as a result, raise overall business performance. The research's actionable suggestions enable SMEs to embrace creative methods, use resources as efficiently as possible, and overcome the obstacles involved in promoting an innovative culture. Overall, the study closes the gap between theory and practice by providing policymakers and stakeholders in SMEs with concrete recommendations. Limitations of the research It is important to recognize some limitations, even though the goal of this study was to offer insightful information about how innovation capabilities affect SME performance in the UAE setting. Because the findings are unique to SMEs operating in the United Arab Emirates and could not be indicative of other geographic or cultural contexts, they might not be generally applicable. Furthermore, the study mostly concentrated on the impact of organizational innovation, innovation culture, and innovation competence, as well as possible contributions from other elements that can have a big impact on SME success.. The complexities of the UAE's market dynamics, laws, and business environment may provide special issues that are not fully covered in this research. These restrictions highlight the need for careful interpretation and offer directions for further study to better understand the many facets of SME success. Conclusion Finally, this research has made a substantial contribution to our understanding of the intricate relationships that exist between innovation capacities and the success of SMEs in the United Arab Emirates. The thorough examination of data collected from 255 SME industry experts using Structural Equation Modeling (SEM-Amos) revealed significant impacts of organizational innovation, culture, and innovation competence on SME performance. The study's conclusions highlight how crucial innovative variables are in determining how well SMEs function in the United Arab Emirates. These observations provide politicians and business executives insightful direction for creating an atmosphere that supports the steady expansion of SMEs, which eventually boosts the nation's economy. A stringent procedure was followed in the evaluation and validation of research constructs to guarantee the validity and reliability of the measurement model. Key build measurement models, including as IC, InC, OI, EE, and SP, showed a pleasing balance with the data that was seen. The model's strong fit was confirmed by fitness indices, including Chisq/df, TLI, CFI, NFI, GFI, and RMSEA, surpassing suggested levels. Modification indices were taken into consideration and changes were made to improve model fit in cases where the original models needed to be refined. Standardized regression coefficients shed light on causal linkages between the constructs, and the structural equation modeling phase dug into investigating relationships between them. The final measuring model showed a good match, confirming the validity, reliability, and unidimensionality of the research constructs. The utilization of AMOS enabled a thorough investigation of causal effects inside the study framework. The robustness and trustworthiness of the research findings are increased when structural equation modeling analysis is combined with validity and reliability tests. Overall, this study fosters a clearer knowledge of the critical role that innovation capabilities play in SME performance in the United Arab Emirates by offering insightful information to the commercial, academic, and governmental communities. The results pave the way for more studies and strategic plans targeted at promoting innovation-driven growth in the SME sector. Declarations The authors did not receive support from any organization for the submitted work. The authors have no relevant financial or non-financial interests to disclose. Ethics The questionnaire for this study was approved by the Research Ethics committee of the University of Sharjah in accordance with the guidelines and regulations of UAE. Informed consent Informed consent was obtained from all the participants involved in the study.The study involved an online questionnaire that did not include inappropriate questions, and participants were assured that their responses would remain confidential and anonymous. Data collected from the questionnaire were securely stored and accessible only to the researcher, with the information used solely for scientific research purposes. The survey questions aimed to enhance understanding without causing harm and were structured to avoid unethical manipulation. References Abbas, J., Zhang, Q., Hussain, I., Akram, S., Afaq, A., & Shad, M. A. 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In Inside the Changing Business of China (pp. 72-96). Routledge. Do-Thi, P., & Do, I. (2022). Quantitative Methodology: Applied Modeling by Using AMOS (Step-By-Step). In Intelligent Systems Modeling and Simulation II: Machine Learning, Neural Networks, Efficient Numerical Algorithm and Statistical Methods (pp. 645-660). Cham: Springer International Publishing. Fuad, D. R. S. M., Musa, K., & Hashim, Z. (2022). Innovation culture in education: A systematic review of the literature. Management in Education, 36(3), 135-149. Ganguly, A., Talukdar, A., & Chatterjee, D. (2019). Evaluating the role of social capital, tacit knowledge sharing, knowledge quality and reciprocity in determining innovation capability of an organization. Journal of knowledge management, 23(6), 1105-1135. Ghani, A. B. H. A., Kaliappen, N., & Jermsittiparsert, K. (2019). Enhancing Malaysian SME employee work engagement: the mediating role of job crafting in the presence of task complexity, self-efficacy and autonomy. International Journal of Innovation, Creativity and Change, 6(11), 1-18. Hanifah, H., Abdul Halim, H., Ahmad, N. H., & Vafaei-Zadeh, A. (2019). Emanating the key factors of innovation performance: leveraging on the innovation culture among SMEs in Malaysia. Journal of Asia Business Studies, 13(4), 559-587. Hinzmann, R. A., Rašticová, M., & Šácha, J. (2019). Factors of employee engagement at the workplace. Do years of service count?. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis. Kang, T. W., Sinha, P. N., Park, C. I., & Lee, Y. K. (2021). Exploring the intra entrepreneurship-employee engagement-creativity linkage and the diverse effects of gender and marital status. Frontiers in Psychology, 12, 736914. Kwon, K., & Kim, T. (2020). An integrative literature review of employee engagement and innovative behavior: Revisiting the JD-R model. Human Resource Management Review, 30(2), 100704. Liu, Q., Qu, X., Wang, D., Abbas, J., & Mubeen, R. (2022). Product market competition and firm performance: business survival through innovation and entrepreneurial orientation amid COVID-19 financial crisis. Frontiers in Psychology, 12, 790923. Lukito-Budi, A. S., Manik, H. F. G. G., & Indarti, N. (2023). Reorienting the organisational strategy of SMEs during the COVID-19 crisis: can entrepreneurial orientation help?. Journal of Strategy and Management, 16(1), 28-40. Ma, C., & Cheok, M. Y. (2022). The impact of financing role and organizational culture in small and medium enterprises: Developing business strategies for economic recovery. Economic Analysis and Policy, 75, 26-38. Migdadi, M. M. (2022). Knowledge management processes, innovation capability and organizational performance. International Journal of Productivity and Performance Management, 71(1), 182-210. Na-Nan, K., Pukkeeree, P., & Chaiprasit, K. (2020). Employee engagement in small and medium-sized enterprises in Thailand: the construction and validation of a scale to measure employees. International Journal of Quality & Reliability Management, 37(9/10), 1325-1343. Naradda Gamage, S. K., Ekanayake, E. M. S., Abeyrathne, G. A. K. N. J., Prasanna, R. P. I. R., Jayasundara, J. M. S. B., & Rajapakshe, P. S. K. (2020). A review of global challenges and survival strategies of small and medium enterprises (SMEs). Economies, 8(4), 79. Naveed, R. T., Alhaidan, H., Al Halbusi, H., & Al-Swidi, A. K. (2022). Do organizations really evolve? The critical link between organizational culture and organizational innovation toward organizational effectiveness: Pivotal role of organizational resistance. Journal of Innovation & Knowledge, 7(2), 100178. Purwanto, A. (2020). Effect of hard skills, soft skills, organizational learning and innovation capability on Islamic University lecturers’ performance. Systematic Reviews in Pharmacy. Purwanto, A., Fahmi, K., & Sulaiman, A. (2023). Linking of Transformational Leadership, Learning Culture, Organizational Structure and School Innovation Capacity: CB SEM AMOS Analysis. Journal of Information Systems and Management (JISMA), 2(3), 1-8. Qader, A. A., Zhang, J., Ashraf, S. F., Syed, N., Omhand, K., & Nazir, M. (2022). Capabilities and opportunities: Linking knowledge management practices of textile-based SMEs on sustainable entrepreneurship and organizational performance in China. Sustainability, 14(4), 2219. Rönkkö, M., & Cho, E. (2022). An updated guideline for assessing discriminant validity. Organizational Research Methods, 25(1), 6-14. Saunila, M. (2020). Innovation capability in SMEs: A systematic review of the literature. Journal of Innovation & knowledge, 5(4), 260-265. Scaliza, J. A. A., Jugend, D., Jabbour, C. J. C., Latan, H., Armellini, F., Twigg, D., & Andrade, D. F. (2022). Relationships among organizational culture, open innovation, innovative ecosystems, and performance of firms: Evidence from an emerging economy context. Journal of Business Research, 140, 264-279. Singh, K., & Rastogi, S. (2023). Corporate governance and financial performance: evidence from listed SMEs in India. Benchmarking: An International Journal, 30(4), 1400-1423. Sotarauta, M., & Suvinen, N. (2021). Place leadership and the challenge of transformation: policy platforms and innovation ecosystems in promotion of green growth. In Dislocation: Awkward Spatial Transitions (pp. 289-308). Routledge. Srisathan, W. A., Ketkaew, C., & Naruetharadhol, P. (2020). The intervention of organizational sustainability in the effect of organizational culture on open innovation performance: A case of thai and chinese SMEs. Cogent business & management, 7(1), 1717408. Tidd, J., & Bessant, J. R. (2020). Managing innovation: integrating technological, market and organizational change. John Wiley & Sons. Utomo, H. J. N., Irwantoro, I., Wasesa, S., Purwati, T., Sembiring, R., & Purwanto, A. (2023). Investigating The Role of Innovative Work Behavior, Organizational Trust, Perceived Organizational Support: An Empirical Study on SMEs Performance. Journal of Law and Sustainable Development, 11(2), e417-e417. Additional Declarations No competing interests reported. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-5307180","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":377944993,"identity":"6254c08f-7096-46fa-a71e-14c17223c669","order_by":0,"name":"Sara Ismail Almansoori","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAABEklEQVRIie3RMUvDQBTA8RcCr0ts1oQI/QophXSp9askBDJlc3HocCLUJbgHv8S5KTi8cJAs+QB1s0tcHM6lIBT1olvhbN0E778cCffj7iUAJtMfLGwuGCVbb+4OGKpnhHAvaUVFr2yW+gUdSlZZWpUss/gqxu83ewnloTi6E7ZfPndPbw/D0RTstYTF7AfSKtKKoRvk03HR4fie4cSDOtOTqgiFg+qUmxw9h9DiBJGaSeiJcL6IxR+bzt8SnnIabADeP/Skxrgql/34EAXqlISTE4G1JC3xC5tItv1HzqPgmDDlwjnzkutUS9zR+lLG5/2vVBd7ofqEN1e3Um7mWrJbDWCrJT4YACx+sddkMpn+S58dtmAOES8VjgAAAABJRU5ErkJggg==","orcid":"","institution":"University of Sharjah","correspondingAuthor":true,"prefix":"","firstName":"Sara","middleName":"Ismail","lastName":"Almansoori","suffix":""},{"id":377944994,"identity":"387df237-b4c7-4efd-87ba-7d3332db0117","order_by":1,"name":"Zehra Canan Araci","email":"","orcid":"","institution":"University of Sharjah","correspondingAuthor":false,"prefix":"","firstName":"Zehra","middleName":"Canan","lastName":"Araci","suffix":""},{"id":377944995,"identity":"a52a44f2-4394-467d-9304-3e23272329f3","order_by":2,"name":"Fikri Dweiri","email":"","orcid":"","institution":"University of Sharjah","correspondingAuthor":false,"prefix":"","firstName":"Fikri","middleName":"","lastName":"Dweiri","suffix":""}],"badges":[],"createdAt":"2024-10-21 22:53:13","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-5307180/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-5307180/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":69107886,"identity":"6e01f318-64da-40d5-ba62-34b7dd4c52a6","added_by":"auto","created_at":"2024-11-15 17:51:19","extension":"png","order_by":1,"title":"Figure 1","display":"","copyAsset":false,"role":"figure","size":256598,"visible":true,"origin":"","legend":"\u003cp\u003eThe formulated hypothetical model\u003c/p\u003e","description":"","filename":"1.png","url":"https://assets-eu.researchsquare.com/files/rs-5307180/v1/aee01055dc92fec5b018e602.png"},{"id":69107884,"identity":"373dd0d0-df88-4c91-9eee-4fb3928ebec1","added_by":"auto","created_at":"2024-11-15 17:51:19","extension":"png","order_by":2,"title":"Figure 2","display":"","copyAsset":false,"role":"figure","size":121244,"visible":true,"origin":"","legend":"\u003cp\u003eStructural Diagram for AMOS-SEM Analysis\u003c/p\u003e","description":"","filename":"floatimage4.png","url":"https://assets-eu.researchsquare.com/files/rs-5307180/v1/72ebf1510f10dbcfa33b84d8.png"},{"id":69107885,"identity":"61e1efb5-a2cc-45ab-b94a-662bd794c10e","added_by":"auto","created_at":"2024-11-15 17:51:19","extension":"png","order_by":3,"title":"Figure 3","display":"","copyAsset":false,"role":"figure","size":154644,"visible":true,"origin":"","legend":"\u003cp\u003eStructural model\u003c/p\u003e","description":"","filename":"floatimage5.png","url":"https://assets-eu.researchsquare.com/files/rs-5307180/v1/7a53255e4ff4a7ab76f7c57e.png"},{"id":69108186,"identity":"f9de3802-b37b-4bfc-bddf-e80fa0b8f162","added_by":"auto","created_at":"2024-11-15 17:59:19","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":1124938,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-5307180/v1/d701bae7-6747-4b1b-bc40-d7257e097b78.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"A Structural Equation Modeling Approach to Evaluating Innovation Dynamics' Effect on SME Performance in the United Arab Emirates","fulltext":[{"header":"1. INTRODUCTION","content":"\u003cp\u003eSmall and Medium Enterprises (SMEs) play a vital role in the world economy, which makes a substantial contribution to GDP and jobs in many nations. Notwithstanding differences in terminology, SMEs are typically distinguished from large corporations by having fewer employees, fewer resources, and lower turnover rates (Naradda et al., 2020; Ma and Cheok, \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). The attainment of organizational goals through the utilization of material, financial, and capital resources is critical to its success, and the contentment of resource suppliers is contingent upon returns relative to other available options (Qader et al., \u003cspan citationid=\"CR30\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Profit creation is still the main indicator of success, highlighting its increasing significance in improving organizational performance. For companies to adjust to changing market demands, innovation is a vital tactic. Innovation is recognized by Lukito-Budi et al. (\u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) as a necessary component of successful firms because it fosters long-term growth and success and improves organizational performance (Utomo et al., \u003cspan citationid=\"CR38\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). By gauging innovativeness, SME innovation culture, and the quantity of innovations put into practice, this study defines innovation. Even though innovation is essential to SMEs' success, emerging nations like the United Arab Emirates have a research deficit in this area. This study aims to explore the relationship between SME performance metrics, behavior, innovativeness, and innovation skills. This work is especially significant because innovation research is a dynamic field. Empirical research on the effect of innovation on SME success has generated mixed results despite a great deal of interest, which calls for more study (Liu et al., \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Furthermore, nothing has been written about little developing countries like the United Arab Emirates, where SMEs are vital to the country's economy. The study addresses the need for empirical research in this context by evaluating important factors impacting the innovative capabilities of UAE SMEs and their influence on performance. Increased innovation is required in organizational settings, especially in the Middle East, due to the surge in demand for goods and services and the shorter product lifecycles (Blaique et al., \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Although earlier research has focused on the operational skills related to service innovation, innovation capability in Middle Eastern organizational contexts\u0026mdash;including the United Arab Emirates\u0026mdash;has received little attention (Alosani et al., \u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). In order to close this gap, this study examines how innovation affects corporate culture in UAE SMEs and organizational performance. This aligns with the strategy focus on knowledge-driven growth of UAE Vision 2021. In order to help SMEs understand the impact of innovation capabilities on organizational performance and to help them align their strategies with the necessity of fostering innovation in the face of competition, the study aims to develop and empirically validate an organizational innovation model for SMEs in the United Arab Emirates.\u003c/p\u003e \u003cp\u003eThe study delineates the essential aspects of innovation in Section 2, presenting the notion of \"innovation capability\" and investigating the performance dimensions of SMEs in conjunction with conjectures concerning the impact of \"innovation capability\" on SMEs performance. In Section 3, the research methodology is outlined, followed by the data analysis phases and the accompanying results. The conclusions of the structural model's testing, validity, and reliability are covered in detail in the section that follows. In conclusion, the report offers insights, policy consequences, and future research directions.\u003c/p\u003e"},{"header":"2. The Conceptual Framework and Basis of Innovation Dynamics","content":"\u003cp\u003eInnovation capacity, which measures how innovative a company is, is a complex idea with many facets (Ganguly et al., \u003cspan citationid=\"CR15\" class=\"CitationRef\"\u003e2019\u003c/span\u003e, Saunila., 2020; Purwanto, \u003cspan citationid=\"CR28\" class=\"CitationRef\"\u003e2020\u003c/span\u003e). Open communication, taking risks, and a dedication to continuous development are all components of a strong innovation culture, which is comprised of shared beliefs and behaviors that promote innovation (Fuad et al, \u003cspan citationid=\"CR14\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Arsawan et al, \u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Support from the top down, resources available for trial, and acknowledgment of creative efforts are all necessary for cultivation (Sotarauta and Suvinen, \u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). In order to get a competitive edge, an organization must innovate by introducing new procedures, frameworks, or methods that are connected to efficient resource utilization (Abbas et al, \u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e2020\u003c/span\u003e). According to research, organizational innovation and business success are positively correlated (Chen et al., \u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e2021\u003c/span\u003e), and this requires strong leadership, a supportive workplace culture, and a well-defined innovation plan (Lukito-Budi et al., \u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Innovation is greatly encouraged by employee engagement, which is characterized by emotional commitment and a readiness to go above and beyond the call of duty (Na-Nan et al., \u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e2020\u003c/span\u003e). Studies have shown that there is a substantial correlation between employee engagement and the results of innovation, and that engaged employees actively contribute new ideas (Kwon and Kim, \u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e2020\u003c/span\u003e). Investigating many aspects of innovation is essential in order to demonstrate a direct correlation between overall innovation and company performance. According to Tidd and Bessant (\u003cspan citationid=\"CR37\" class=\"CitationRef\"\u003e2020\u003c/span\u003e), earlier research has categorized innovation into several categories, including process and product innovation, marketing innovation, and organizational innovation.\u003c/p\u003e \u003cp\u003eSME performance is a complex concept that measures the achievements and success of a business. This study looks at three aspects: financial performance, operational performance, and product quality. It acknowledges the importance of varied performance measurements (Battesini et al., \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). Both intrinsic and extrinsic qualities are included in product quality, internal operational productivity and efficiency are assessed by operational performance, and sales growth, profitability, net profit margin, financial outcomes, and cash flow are closely examined by financial performance. It is important to note that there is no globally accepted definition for product quality, which is a complex and multidimensional issue (Alzoubi et al., \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Operational performance, which is frequently a composite metric, represents the internal operation performance of a business in terms of productivity, efficiency, and quality of its processes and products. In order to ensure consistency and robustness of results, operational performance measurement items are derived from well-established instruments used in previous studies (Al-Hakimi et al., \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Reaching financial and market share goals is the definition of financial performance. Drawing on well-established studies for measurement, this study takes into account a number of financial indicators, including corporate sales growth, profitability, net profit margin, financial outcomes, and cash flow (Ahinful et al, \u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Singh and Rastogi, \u003cspan citationid=\"CR34\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). After analyzing earlier studies, we have determined that organizational culture, technology utilization, and managerial support are the three main elements impacting innovation in firms. Even though it is acknowledged that innovation affects SME success, the literature that has already been written has serious flaws. First of all, there are conflicting theories since the word \"capacity for innovation\" lacks a precise and uniform meaning. Many research ignore more comprehensive innovation models in favor of a restricted focus on product innovation. Second, research frequently assesses business innovation capacity, offering scant information. Finally, the organizational culture component of innovation is ambiguous due to its collaborative character. We investigate an organization's capability for innovation via the viewpoints of its employees in an effort to close these disparities. In the context of a developing nation, we particularly look into how organizational culture and information flow affect creative capacity. This study makes a contribution by emphasizing the critical role that informal relationships play in encouraging information sharing and by offering a socio-structural approach. The proposed paradigm, presented in Fig.\u0026nbsp;\u003cspan refid=\"Fig1\" class=\"InternalRef\"\u003e1\u003c/span\u003e, clarifies the conceptualization of innovation ability. The methodology, survey findings, and constraints are covered in the framework, which focuses on two important dimensions: the degree and scope of innovation. By using this model, we hope to make sense of the intricacies found in the literature and offer a thorough grasp of innovation capability.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003cp\u003eThe synergy between innovation and the performance of SMEs holds immense importance. The following hypotheses aim to elucidate the significance of these dimensions in shaping the success of SMEs in this dynamic economic milieu.\u003c/p\u003e \u003cp\u003eH1: There is a significant relationship between Innovation Capability and the performance of UAE SMEs.\u003c/p\u003e \u003cp\u003eH2: Innovation Culture holds significance in relation to the performance of UAE SMEs.\u003c/p\u003e \u003cp\u003eH3: The performance of UAE SMEs is significantly influenced by Organizational Innovation.\u003c/p\u003e \u003cp\u003eH4. Employee Engagement (EE) has substantial effect on the performance of UAE SMEs\u003c/p\u003e \u003cp\u003eThe measurement items for the study constructs are presented in Table\u0026nbsp;\u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e1\u003c/span\u003e.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab1\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 1\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eCodes and Measurement Items for Study Constructs\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"3\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eItem code\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eItem definition\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eRefrences\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"3\" nameend=\"c3\" namest=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"BoldUnderline\" class=\"BoldUnderline\" name=\"Emphasis\"\u003eInnovation Capability (IC)\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIC1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eOrganization actively encourages and supports employees to generate innovative ideas.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\" morerows=\"7\" rowspan=\"8\"\u003e \u003cp\u003e(Ganguly et al, \u003cspan citationid=\"CR15\" class=\"CitationRef\"\u003e2019\u003c/span\u003e, Saunila., 2020; Purwanto, \u003cspan citationid=\"CR28\" class=\"CitationRef\"\u003e2020\u003c/span\u003e, Fuad et al, \u003cspan citationid=\"CR14\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Arsawan et al, \u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e2022\u003c/span\u003e, Migdadi, \u003cspan citationid=\"CR24\" class=\"CitationRef\"\u003e2022\u003c/span\u003e)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIC2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eA culture of innovation is embraced throughout the organization..\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIC3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eResources (e.g., budget, time, talent) are effectively allocated to support innovation initiatives.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIC4\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCollaboration with external partners or organizations is undertaken to drive innovation.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIC5\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eRisks associated with innovative projects are managed effectively.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIC6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCompetitiveness in the market is enhanced by innovation capability within the organization.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIC7\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eRemaining well-informed about market trends, customer needs, and competitors is essential for guiding innovation.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIC8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCustomers and end-users are actively involved in the innovation process (e.g., through feedback).\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"3\" nameend=\"c3\" namest=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"BoldUnderline\" class=\"BoldUnderline\" name=\"Emphasis\"\u003eInnovation Culture (InC)\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInC 1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTop leadership actively supports and promotes innovation within SME.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\" morerows=\"7\" rowspan=\"8\"\u003e \u003cp\u003e(Fuad et al, \u003cspan citationid=\"CR14\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Hanifah et al, \u003cspan citationid=\"CR17\" class=\"CitationRef\"\u003e2019\u003c/span\u003e, Arsawan et al, \u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e2022\u003c/span\u003e, Naveed et al, \u003cspan citationid=\"CR27\" class=\"CitationRef\"\u003e2022\u003c/span\u003e,\u003c/p\u003e \u003cp\u003eSrisathan et al, \u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e2020\u003c/span\u003e, Arsawan et al, \u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e2022\u003c/span\u003e, Scaliza et al, \u003cspan citationid=\"CR33\" class=\"CitationRef\"\u003e2022\u003c/span\u003e)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInC 2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eOpen and transparent communication about new ideas is encouraged by the organization.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInC 3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEmployees are empowered to take ownership of their innovative initiatives.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInC 4\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSufficient resources (budget, time, talent) are allocated to support innovative projects.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInC 5\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eA culture of risk tolerance is fostered within SME, encouraging employees to take calculated risks in pursuit of innovation.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInC 6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eWell-defined innovation processes or stages that guide idea development and implementation are in place within organization.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInC 7\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eRecognition and rewards are given to individuals and teams for their contributions to innovation.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInC 8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEmployees feel that their innovative efforts contribute to the overall success and growth of SME.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"3\" nameend=\"c3\" namest=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"BoldUnderline\" class=\"BoldUnderline\" name=\"Emphasis\"\u003eOrganizational Innovation (OI)\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eOI1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eNew technologies and tools are actively sought and adopted by SME to improve processes and operations.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\" morerows=\"7\" rowspan=\"8\"\u003e \u003cp\u003e(Tidd and Bessant, \u003cspan citationid=\"CR37\" class=\"CitationRef\"\u003e2020\u003c/span\u003e, Abbas et al, \u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e2020\u003c/span\u003e, Chen et al, \u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e2021\u003c/span\u003e, Lukito-Budi et al, \u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e2023\u003c/span\u003e, Abdul-Halim et al, \u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2019\u003c/span\u003e)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eOI2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEmployees are encouraged and empowered to propose and implement changes to improve workflow.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eOI3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eA well-defined process for evaluating and implementing innovative ideas within the organization is in place.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eOI4\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eInvestments in training and development are made by SME to enhance employees' skills and knowledge related to innovation.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eOI5\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eA culture of open communication, encouraging the sharing of innovative ideas and feedback, is fostered by organization.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eOI6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eFeedback from customers and stakeholders is actively sought by organization to drive product or service improvements.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eOI7\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eInnovative changes that have positively impacted competitiveness have been successfully implemented by SME.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eOI8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEmployees believe that their innovative contributions are recognized and valued within the organization.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"3\" nameend=\"c3\" namest=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"BoldUnderline\" class=\"BoldUnderline\" name=\"Emphasis\"\u003eEmployee Engagement (EE)\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEE1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEmployees in my organization actively participate in innovation initiatives.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\" morerows=\"9\" rowspan=\"10\"\u003e \u003cp\u003e(Na-Nan et al, \u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e2020\u003c/span\u003e, Kwon and Kim, \u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e2020\u003c/span\u003e, Ghani et al, \u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e2019\u003c/span\u003e, Kang et al, \u003cspan citationid=\"CR19\" class=\"CitationRef\"\u003e2021\u003c/span\u003e, Hinzmann et al, \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2019\u003c/span\u003e)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEE2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe organization fosters a culture that encourages employees to share innovative ideas.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEE3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEmployee engagement positively influences the organization's innovation capability.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEE4\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEngaged employees feel empowered to take ownership of their work and contribute to innovation efforts.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEE5\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEmployee engagement enhances collaboration among employees, leading to better problem-solving.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEE6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEngaged employees actively seek solutions to challenges, driving organizational innovation.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEE7\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEmployee engagement positively impacts the organization's overall performance.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEE8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEngaged employees are customer-focused, leading to improved customer experiences.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEE9\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe organization recognizes and rewards employee contributions to innovation and performance.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEE10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEmployee engagement plays a vital role in the success of SMEs in the dynamic UAE business landscape.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"3\" nameend=\"c3\" namest=\"c1\"\u003e \u003cp\u003e\u003cb\u003eSMEs\u0026rsquo; Performance (SP)\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eApplying innovation capabilities enhances the efficiency of SME's operations.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\" morerows=\"9\" rowspan=\"10\"\u003e \u003cp\u003e(Utomo et al., \u003cspan citationid=\"CR38\" class=\"CitationRef\"\u003e2023\u003c/span\u003e, Qader et al., \u003cspan citationid=\"CR30\" class=\"CitationRef\"\u003e2022\u003c/span\u003e,Naradda et al., 2020; Chen et al, \u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e2021\u003c/span\u003e) Ma and Cheok, \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2022\u003c/span\u003e, Al-Hakimi et al., \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e2023\u003c/span\u003e, Liu et al., \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e2022\u003c/span\u003e,Battesini et al., \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e2021\u003c/span\u003e,\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eImprovements in the SME's ability to adapt to market changes have been realized through innovation capabilities.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eInnovation capabilities have contributed to providing better value to customers.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP4\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eIncreased competitiveness of SME is attributed to the application of innovation capabilities.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP5\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe application of innovation capabilities has positively impacted SME's talent attraction and retention.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe improvement in non-financial performance of SME is a direct result of the adoption of innovation capabilities.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP7\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eInnovation capabilities have contributed to SME's financial performance, such as increased profitability.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eApplying innovation capabilities has positively influenced SME's overall business growth.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP9\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEnhancements to SME's reputation and brand value have been achieved through the implementation of innovation capabilities.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe application of innovation capabilities contributes to the nation's economic growth and development.\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e"},{"header":"3. Methodology","content":"\u003cp\u003eThis study uses a thorough method to gathering data, starting with a review of the literature to determine the key variables affecting innovation skills and how they affect SMEs. After that, data was gathered using a standardized questionnaire that included 44 factors found in the literature. A pilot study that used a strictly quantitative research approach used a survey tool. The questionnaires for the research tools were developed using a five-point Likert scale. The Likert scale was judged appropriate given the use of SEM-AMOS for data analysis, particularly for queries pertaining to unobserved data and prospective attitudes or perceptions, as suggested by Purwanto (2023). Methods of deliberate and systematic sampling were used to evaluate how important aspects of SMEs' innovation capacities affected them. Professionals conducted the last survey rounds in order to identify the key variables that significantly influence an individual's capacity for invention. After data screening, 255 valid responses were obtained via the distribution of structured questionnaires to SME Owners/Entrepreneurs, SME Managers and Executives, Innovation Managers, and Employees Involved in Innovation. A variety of viewpoints on the dynamics pertaining to innovation in SMEs are provided by the respondents' dispersion across professional positions. 33.33% of the respondents were employees involved in innovation, the largest segment. Of the respondents, 21.18% were SME Owners/Entrepreneurs, 23.92% were SME Managers and Executives, and 21.57% were Innovation Managers/Officers. This comprehensive representation ensures a holistic view of innovation processes, considering both leadership and employee perspectives. Examining the professional experience of respondents provides insights into the depth of expertise contributing to the study. A substantial portion, accounting for 35.2%, reported having more than 16 years of experience. Additionally, 26.4% had 11\u0026ndash;15 years of experience, 22% had 6\u0026ndash;10 years, and 16.4% had 1\u0026ndash;5 years of experience. This diverse range ensures that insights are derived from individuals with varying levels of familiarity with innovation processes, providing a nuanced understanding. The academic qualifications of respondents underscore the educational diversity within the sample. The majority (61.18%) holds a Bachelor's degree, indicating a strong foundational understanding. Furthermore, 22.35% have a Master's degree, while 12.94% possess a PhD. A smaller percentage holds a Diploma (2.35%), and 1.18% indicated other qualifications. This diversity enriches the study by incorporating insights from individuals with different levels of academic training. Figure\u0026nbsp;\u003cspan refid=\"Fig2\" class=\"InternalRef\"\u003e2\u003c/span\u003e illustrates a systematic, sequential process used to analyze and evaluate the theoretical model employing AMOS-SEM.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003cp\u003eThe model evaluation process involves several key steps, as depicted in Fig.\u0026nbsp;\u003cspan refid=\"Fig2\" class=\"InternalRef\"\u003e2\u003c/span\u003e. Firstly, the screened data is input into SEM-AMOS. Secondly, the SEM-AMOS software is executed to simulate the model. Thirdly, Confirmatory Factor Analysis (CFA) is employed to assess the measurement model. Fourthly, the theoretical model undergoes testing and is modified as necessary. Fifthly, the Structural Model is evaluated. Finally, the sixth step entails hypothesis testing to validate the model's predictions and relationships.\u003c/p\u003e"},{"header":"4. DATA ANALYSIS","content":"\u003cp\u003eThroughout this investigation, the assumptions of normality were evaluated both at the univariate and multivariate levels. The normality examination involved a meticulous analysis of skewness and kurtosis for the measured variables, and the findings consistently fell within the acceptable range of -1 to +\u0026thinsp;1, as recommended by [38]. Additionally, the presence of multicollinearity, indicating potential associations among two or more variables leading to redundant response information, was thoroughly assessed. VIF were employed for multicollinearity assessment, with VIF values falling between 1.026 and 1.289, and tolerance values ranging from 0.73 to 0.965. These results affirm that the data analysis encountered no complications associated with multicollinearity. The study's constructs, encompassing IC with 7 factors, InC with 8 factors, OI with 8 factors, EE with 10 factors, and SP with 10 factors, underwent CFA to evaluate the measurement model. The CFA model exhibited a commendable fit, as indicated by fitness metrics detailed in Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e. Key indices such as the Tucker-Lewis Index (TLI) and Comparative Fit Index (CFI) surpassed 0.90, the Normed Fit Index (NFI) exceeded 0.80, and the Root Mean Square Error of Approximation (RMSEA) remained below 0.08. The final CFA fitness indicators were compared with the predefined values for each fit index in the measurement model, as outlined in Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab2\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 2\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eSimultaneous fitness rates for CFA (Measurement Model)\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"4\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eName of Index\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eAcceptance Level\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eIndex Value\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eComments\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eChisq/df\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eChisq/df\u0026thinsp;\u0026le;\u0026thinsp;3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e1.614\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eTLI\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTLI\u0026thinsp;\u0026ge;\u0026thinsp;0.9 means satisfactory\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.905\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eCFI\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCFI\u0026thinsp;\u0026ge;\u0026thinsp;0.9 means satisfactory fit.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.912\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eNFI\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eNFI\u0026thinsp;\u0026ge;\u0026thinsp;0.80 suggests a good fit\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.810\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eGFI\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGFI\u0026thinsp;\u0026ge;\u0026thinsp;0.80 suggests a good fit.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.804\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eRMSEA\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eRMSEA\u0026thinsp;\u0026le;\u0026thinsp;0.08 mediocre fit.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.047\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eIn this investigation, the validity of the study constructs is scrutinized through an examination of convergent validity, discrimination validity, and their interrelations with other structural constructs. Acceptable convergent validity is implied when the Average Extracted Variance (AVE) is 0.5 or higher (R\u0026ouml;nkk\u0026ouml; and Cho, \u003cspan citationid=\"CR31\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). The determination of discriminative validity involves confirming that the AVE exceeds the square of the correlation coefficient between the constructs, signifying readiness for the subsequent analysis in the structural model phase. Additionally, the reliability is assessed through internal reliability (Cronbach alpha\u0026thinsp;\u0026gt;\u0026thinsp;=\u0026thinsp;0.70) and construct reliability (CR\u0026thinsp;\u0026gt;\u0026thinsp;=\u0026thinsp;0.70) in this study. Table\u0026nbsp;\u003cspan refid=\"Tab3\" class=\"InternalRef\"\u003e3\u003c/span\u003e provides insights into the reliability, AVE, and Constructs Reliability of the measuring model, while Table\u0026nbsp;\u003cspan refid=\"Tab4\" class=\"InternalRef\"\u003e4\u003c/span\u003e presents the details of discrimination validity.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab3\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 3\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eCFA results for all structures\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"5\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cem\u003eGroup/ Construct\u003c/em\u003e\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003e\u003cem\u003eInfluential Factors\u003c/em\u003e\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003e\u003cem\u003eFactor Loading\u003c/em\u003e\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eCR (\u0026ge;\u0026thinsp;0.6)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eAVE\u003c/p\u003e \u003cp\u003e(\u0026ge;\u0026thinsp;0.5)\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"ItalicUnderline\" class=\"ItalicUnderline\" name=\"Emphasis\"\u003eIC\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eIC1\u003c/p\u003e \u003cp\u003eIC2\u003c/p\u003e \u003cp\u003eIC3\u003c/p\u003e \u003cp\u003eIC4\u003c/p\u003e \u003cp\u003eIC5\u003c/p\u003e \u003cp\u003eIC6\u003c/p\u003e \u003cp\u003eIC7\u003c/p\u003e \u003cp\u003eIC8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e\u003cem\u003e0.632\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.744\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.803\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.816\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.857\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.838\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.870\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.839\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e\u003cem\u003e0.73\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e\u003cem\u003e0.62\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"ItalicUnderline\" class=\"ItalicUnderline\" name=\"Emphasis\"\u003eInC\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eInC1\u003c/p\u003e \u003cp\u003eInC2\u003c/p\u003e \u003cp\u003eInC3\u003c/p\u003e \u003cp\u003eInC4\u003c/p\u003e \u003cp\u003eInC5\u003c/p\u003e \u003cp\u003eInC6\u003c/p\u003e \u003cp\u003eInC7\u003c/p\u003e \u003cp\u003eInC8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e\u003cem\u003e0.726\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.687\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.713\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.723\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.791\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.815\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.857\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.836\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e\u003cem\u003e0.81\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e\u003cem\u003e0.74\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"ItalicUnderline\" class=\"ItalicUnderline\" name=\"Emphasis\"\u003eOI\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eOI1\u003c/p\u003e \u003cp\u003eOI2\u003c/p\u003e \u003cp\u003eOI3\u003c/p\u003e \u003cp\u003eOI4\u003c/p\u003e \u003cp\u003eOI5\u003c/p\u003e \u003cp\u003eOI6\u003c/p\u003e \u003cp\u003eOI7\u003c/p\u003e \u003cp\u003eOI8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e\u003cem\u003e0.857\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.638\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.712\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.629\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.820\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.847\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.720\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.713\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e\u003cem\u003e0.76\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e\u003cem\u003e0.68\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"ItalicUnderline\" class=\"ItalicUnderline\" name=\"Emphasis\"\u003eEE\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEE1\u003c/p\u003e \u003cp\u003eEE2\u003c/p\u003e \u003cp\u003eEE3\u003c/p\u003e \u003cp\u003eEE4\u003c/p\u003e \u003cp\u003eEE5\u003c/p\u003e \u003cp\u003eEE6\u003c/p\u003e \u003cp\u003eEE7\u003c/p\u003e \u003cp\u003eEE8\u003c/p\u003e \u003cp\u003eEE9\u003c/p\u003e \u003cp\u003eEE10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e\u003cem\u003e0.708\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.860\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.884\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.667\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.671\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.803\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.637\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.891\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.816\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.857\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e\u003cem\u003e0.73\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e\u003cem\u003e0.66\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cem\u003eSP\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e\u003cem\u003eSP1\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003eSP2\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003eSP3\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003eSP4\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003eSP5\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003eSP6\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003eSP7\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003eSP8\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003eSP9\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003eSP10\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e\u003cem\u003e0.785\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.892\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.771\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.779\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.794\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.770\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.621\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.785\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.666\u003c/em\u003e\u003c/p\u003e \u003cp\u003e\u003cem\u003e0.982\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e\u003cem\u003e0.84\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e\u003cem\u003e0.69\u003c/em\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eTable\u0026nbsp;\u003cspan refid=\"Tab4\" class=\"InternalRef\"\u003e4\u003c/span\u003e displays the diagonal (bold) values, indicating the square root of the AVE, while the remaining values denote the corresponding structural elements. The attainment of discrimination is confirmed when a diagonal value surpasses the values in both its column and row [29].\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab4\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 4\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eDiscriminant validity\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"6\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eConstructs\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003e\u003cspan type=\"ItalicUnderline\" class=\"ItalicUnderline\" name=\"Emphasis\"\u003eIC\u003c/span\u003e\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003e\u003cspan type=\"ItalicUnderline\" class=\"ItalicUnderline\" name=\"Emphasis\"\u003eInC\u003c/span\u003e\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003e\u003cspan type=\"ItalicUnderline\" class=\"ItalicUnderline\" name=\"Emphasis\"\u003eOI\u003c/span\u003e\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003e\u003cspan type=\"ItalicUnderline\" class=\"ItalicUnderline\" name=\"Emphasis\"\u003eEE\u003c/span\u003e\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003e\u003cem\u003eSP\u003c/em\u003e\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"BoldItalicUnderline\" class=\"BoldItalicUnderline\" name=\"Emphasis\"\u003eIC\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e\u003cb\u003e(0.635)\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"BoldItalicUnderline\" class=\"BoldItalicUnderline\" name=\"Emphasis\"\u003eInC\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.122\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e\u003cb\u003e(0.787)\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"BoldItalicUnderline\" class=\"BoldItalicUnderline\" name=\"Emphasis\"\u003eOI\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.291\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.295\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e\u003cb\u003e(0.734)\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cspan type=\"BoldItalicUnderline\" class=\"BoldItalicUnderline\" name=\"Emphasis\"\u003eEE\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.271\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.098\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e0.218\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e\u003cb\u003e(0.724)\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cb\u003eSP\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.274\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.287\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e0.219\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.272\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e\u003cb\u003e(0.711)\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eThe convergent validity of all constructs in this study has been satisfactorily established. With the positive outcomes in terms of reliability and validity, the study can confidently progress to the subsequent stage of multivariate analysis. Consequently, the subsequent sections present the analysis conducted on structural equation modeling in this research.\u003c/p\u003e \u003cdiv id=\"Sec5\" class=\"Section2\"\u003e \u003ch2\u003e4.1 Structural equation modeling Analysis\u003c/h2\u003e \u003cp\u003eThe subsequent phase in the analytical model process Upon confirming the uni-dimensionality, reliability, and validity of the research constructs, the subsequent analytical phase involves integrating all constructs into a comprehensive structural equation model (SEM) utilizing the Analysis of Moment Structure (AMOS). The research assessment framework's exogenous and endogenous variables are systematically organized, commencing with the exogenous variables \u0026ndash; IC, InC, OI, and EE \u0026ndash; and concluding with the endogenous variable, SP. This structural arrangement is visually represented in Fig.\u0026nbsp;\u003cspan refid=\"Fig3\" class=\"InternalRef\"\u003e3\u003c/span\u003e, where each construct is interconnected by arrows indicating the hypothesized directional relationships. However, the model extends beyond merely testing individual hypotheses, as it serves as a tool to scrutinize the multidirectional relationships within the entire array of research constructs. To evaluate the structural measurement models, a set of fitness indices is employed and presented in Table\u0026nbsp;\u003cspan refid=\"Tab5\" class=\"InternalRef\"\u003e5\u003c/span\u003e. These indices serve as a critical gauge of the model's goodness-of-fit. Importantly, the results indicate that the model has achieved an acceptable level of goodness-of-fit, substantiating the model's capability to accurately represent the complex interplay among the research constructs.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab5\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 5\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003estructural model Fitness indices\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"4\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIndex\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eAcceptance Level\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eIndex Value\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eComments\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cb\u003eChisq/df\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eChisq/df\u0026thinsp;\u0026le;\u0026thinsp;3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e1.468\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cb\u003eTLI\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTLI\u0026thinsp;\u0026ge;\u0026thinsp;0.9\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.920\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cb\u003eCFI\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCFI\u0026thinsp;\u0026ge;\u0026thinsp;0.9\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.927\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cb\u003eNFI\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eNFI\u0026thinsp;\u0026ge;\u0026thinsp;0.80\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.804\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cb\u003eGFI\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGFI\u0026thinsp;\u0026ge;\u0026thinsp;0.80\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.820\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cb\u003eRMSEA\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eRMSEA\u0026thinsp;\u0026le;\u0026thinsp;0.08.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.042\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003efulfilled\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003c/div\u003e"},{"header":"5 Discussion on Research Findings","content":"\u003cp\u003eThe structural model demonstrates a satisfactory fit to the established fitness requirements, meeting the acceptable level of fitness indexes as outlined by Awang (2015) and Hair et al. (2011). The standardized regression coefficients for all research constructs within the final structural measurement model are presented in the path diagram, providing insights into the causal effects and impacts of multiple constructs. The fitness indexes, crucial for assessing the alignment of the hypothesized model with the available data, were observed to be within acceptable levels. These indexes serve as indicators of the model's adequacy and coherence with the empirical data (Awang, 2015). The standardized regression weights, representing the estimated beta coefficients, offer a quantitative measure of the influences exerted by both exogenous and endogenous variables. Figure\u0026nbsp;\u003cspan refid=\"Fig3\" class=\"InternalRef\"\u003e3\u003c/span\u003e illustrates the output, showcasing standardized regression coefficients with an R\u0026sup2; value of 0.72. The Analysis Moment of Structures (AMOS) was employed for structural equation modeling, generating standardized regression weights and unstandardized regression weights for path analysis. In this analysis, the standardized regression weights were prioritized due to their interpretability, aligning with the recommendation of Do-Thi and Do, (\u003cspan citationid=\"CR13\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). The criteria for evaluating the structural model encompass squared multiple correlations (R\u0026sup2;) and path coefficients (β) for each path classifications, an R\u0026sup2; value of 0.72 for the endogenous latent variable (SP) indicates substantial explanatory power. This suggests that the developed model effectively elucidates the relationships among the constructs within the research framework. Testing the research hypotheses, the results presented in Table\u0026nbsp;\u003cspan refid=\"Tab6\" class=\"InternalRef\"\u003e6\u003c/span\u003e offer a detailed examination of the standardized regression weights and their significance for each pathway within the structural model.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab6\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 6\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eStandard Weight Regression and significance level of study constructs.\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"4\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003ePath\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003ep-value\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eBeta coefficient\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eStatus\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP \u0026lt;--- IC\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e. 001\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.43\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eSupported\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP \u0026lt;--- InC\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.65\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eSupported\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP \u0026lt;--- IO\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e.001\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.32\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eSupported\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSP \u0026lt;--- EE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e. 024\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.28\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eSupported\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eThese standardized regression weights signify the strength and direction of the connections between the exogenous variables (IC, InC, OI, EE) and the endogenous variable, SP. The statistical significance of each path is evaluated based on the corresponding p-value, with a lower p-value indicating stronger evidence against the null hypothesis. Starting with the path from IC to SP, the substantial beta coefficient of 0.43 and a low p-value of 0.001 support the hypothesis that higher levels of IC positively impact SMEs\u0026rsquo; performance. Moving on to the relationship between InC and SP, the highly significant and positive association is evident with a substantial beta coefficient of 0.65 and an extremely low p-value of 0.000. This robustly supports the idea that a conducive innovation culture positively influences SMEs\u0026rsquo; performance. Considering the path from OI to SP, a significant positive relationship is revealed, supported by a beta coefficient of 0.32 and a p-value of 0.001. This provides evidence in favor of the hypothesis that higher levels of Organizational Innovation contribute positively to SMEs\u0026rsquo; performance. Examining the pathway from EE to SP, a significant positive connection is observed, characterized by a beta coefficient of 0.28 and a p-value of 0.024. This confirms the hypothesis that increased levels of Employee Engagement positively impact SMEs\u0026rsquo; performance. In summary, the statistical significance of all paths within the structural model substantiates the proposed relationships between the examined constructs. The beta coefficients offer insights into the strength of these relationships, emphasizing the importance of factors such as Innovation Capability, Innovation Culture, Organizational Innovation, and Employee Engagement in influencing the performance of UAE SMEs.\u003c/p\u003e\n\u003ch3\u003e5. Study Contribution\u003c/h3\u003e\n\u003cp\u003eThis section outlines the significant contributions of the study to the existing body of knowledge. By exploring the interplay between innovation capabilities and SME performance, the research makes noteworthy theoretical advancements. Additionally, it provides practical insights and policy implications, contributing to the enhancement of the SMEs sector.\u003c/p\u003e \u003cdiv id=\"Sec8\" class=\"Section2\"\u003e \u003ch2\u003e6.1 Theoretical contribution\u003c/h2\u003e \u003cp\u003eThis research offers a sophisticated understanding of the connection between innovation skills and SME success, which significantly advances the body of theoretical information already in existence. The research offers insights into the precise mechanisms through which innovation skills impact SME outcomes, while also improving and expanding upon current theoretical frameworks. The research advances the creation of a more thorough and contextually appropriate theoretical framework by exploring the nuances of innovation processes within the SME setting. The study's conceptual models and frameworks are useful resources for academics and professionals who want to investigate and comprehend the dynamics of innovation capacities in the SME sector.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec9\" class=\"Section2\"\u003e \u003ch2\u003e6.2 Policy Implications and Practical Contribution\u003c/h2\u003e \u003cp\u003eThe study's conclusions have significant ramifications for the formulation of policies and real-world implementations for SMEs. The research reveals the complex relationship between innovation skills and SME performance, giving policymakers evidence-based guidance to develop successful programs that encourage innovation in SMEs. The report also provides useful advice for entrepreneurs and managers of SMEs, including doable actions to boost innovation capacities and, as a result, raise overall business performance. The research's actionable suggestions enable SMEs to embrace creative methods, use resources as efficiently as possible, and overcome the obstacles involved in promoting an innovative culture. Overall, the study closes the gap between theory and practice by providing policymakers and stakeholders in SMEs with concrete recommendations.\u003c/p\u003e \u003c/div\u003e"},{"header":"Limitations of the research","content":"\u003cp\u003eIt is important to recognize some limitations, even though the goal of this study was to offer insightful information about how innovation capabilities affect SME performance in the UAE setting. Because the findings are unique to SMEs operating in the United Arab Emirates and could not be indicative of other geographic or cultural contexts, they might not be generally applicable. Furthermore, the study mostly concentrated on the impact of organizational innovation, innovation culture, and innovation competence, as well as possible contributions from other elements that can have a big impact on SME success.. The complexities of the UAE's market dynamics, laws, and business environment may provide special issues that are not fully covered in this research. These restrictions highlight the need for careful interpretation and offer directions for further study to better understand the many facets of SME success.\u003c/p\u003e"},{"header":"Conclusion","content":"\u003cp\u003eFinally, this research has made a substantial contribution to our understanding of the intricate relationships that exist between innovation capacities and the success of SMEs in the United Arab Emirates. The thorough examination of data collected from 255 SME industry experts using Structural Equation Modeling (SEM-Amos) revealed significant impacts of organizational innovation, culture, and innovation competence on SME performance. The study's conclusions highlight how crucial innovative variables are in determining how well SMEs function in the United Arab Emirates. These observations provide politicians and business executives insightful direction for creating an atmosphere that supports the steady expansion of SMEs, which eventually boosts the nation's economy. A stringent procedure was followed in the evaluation and validation of research constructs to guarantee the validity and reliability of the measurement model. Key build measurement models, including as IC, InC, OI, EE, and SP, showed a pleasing balance with the data that was seen. The model's strong fit was confirmed by fitness indices, including Chisq/df, TLI, CFI, NFI, GFI, and RMSEA, surpassing suggested levels. Modification indices were taken into consideration and changes were made to improve model fit in cases where the original models needed to be refined. Standardized regression coefficients shed light on causal linkages between the constructs, and the structural equation modeling phase dug into investigating relationships between them. The final measuring model showed a good match, confirming the validity, reliability, and unidimensionality of the research constructs. The utilization of AMOS enabled a thorough investigation of causal effects inside the study framework. The robustness and trustworthiness of the research findings are increased when structural equation modeling analysis is combined with validity and reliability tests. Overall, this study fosters a clearer knowledge of the critical role that innovation capabilities play in SME performance in the United Arab Emirates by offering insightful information to the commercial, academic, and governmental communities. The results pave the way for more studies and strategic plans targeted at promoting innovation-driven growth in the SME sector.\u003c/p\u003e"},{"header":"Declarations","content":"\u003cp\u003eThe authors did not receive support from any organization for the submitted work. The authors have no relevant financial or non-financial interests to disclose.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eEthics\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe questionnaire for this study was approved by the Research Ethics committee of the University of Sharjah in accordance with the guidelines and regulations of UAE.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eInformed consent\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eInformed consent was obtained from all the participants involved in the study.The study involved an online questionnaire that did not include inappropriate questions, and participants were assured that their responses would remain confidential and anonymous. Data collected from the questionnaire were securely stored and accessible only to the researcher, with the information used solely for scientific research purposes. The survey questions aimed to enhance understanding without causing harm and were structured to avoid unethical manipulation.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\n\u003cli\u003eAbbas, J., Zhang, Q., Hussain, I., Akram, S., Afaq, A., \u0026amp; Shad, M. A. (2020). Sustainable innovation in small medium enterprises: the impact of knowledge management on organizational innovation through a mediation analysis by using SEM approach. Sustainability, 12(6), 2407.\u003c/li\u003e\n\u003cli\u003eAbdul-Halim, H., Ahmad, N. H., Geare, A., \u0026amp; Thurasamy, R. (2019). Innovation culture in SMEs: The importance of organizational culture, organizational learning and market orientation. 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Journal of Law and Sustainable Development, 11(2), e417-e417.\u003c/li\u003e\n\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":true,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"discover-applied-sciences","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"","sideBox":"Learn more about [Discover Applied Sciences](https://link.springer.com/journal/42452)","snPcode":"42452","submissionUrl":"https://submission.springernature.com/new-submission/42452/3","title":"Discover Applied Sciences","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Discover Series","inReviewEnabled":true,"inReviewRevisionsEnabled":true},"keywords":"Innovation capabilities, SME performance, UAE, SEM-AMOS, Innovation culture","lastPublishedDoi":"10.21203/rs.3.rs-5307180/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-5307180/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eIt is essential to comprehend the function of innovative capabilities in the SME-driven landscape. Despite the significance of SMEs, it is unclear how innovation capabilities affect their success, which is why this study was conducted as part of an investigation. The goal of this study is to investigate the intricate interactions that exist between innovation capacities and the performance of SMEs in the United Arab Emirates. Data from 255 SME industry experts in the UAE were evaluated using SEM-Amos, and the results showed that organizational innovation, employee engagement, culture, and innovation capability all had a major impact on performance. According to the report, innovative considerations have a major impact on SME success in the United Arab Emirates, providing valuable strategic insights. These results serve as a guidance for company executives and politicians in creating an atmosphere that supports the nation's continued SME growth and economic prosperity.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003cp\u003e \u003c/p\u003e","manuscriptTitle":"A Structural Equation Modeling Approach to Evaluating Innovation Dynamics' Effect on SME Performance in the United Arab Emirates","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2024-11-15 17:51:14","doi":"10.21203/rs.3.rs-5307180/v1","editorialEvents":[{"type":"communityComments","content":0},{"type":"decision","content":"Revision requested","date":"2024-11-29T14:21:34+00:00","index":"","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2024-11-29T11:26:30+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"17429849501667109344669327567412234219","date":"2024-11-28T06:09:08+00:00","index":"hide","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2024-11-27T19:21:38+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"319459756254837702843990138963907320256","date":"2024-11-27T19:08:52+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"276479459854554790910338818839033411595","date":"2024-11-26T08:06:00+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"286801299938858222251858394092924534448","date":"2024-11-26T05:59:45+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"46841993191331885853050234186873194242","date":"2024-11-15T12:45:47+00:00","index":"hide","fulltext":""},{"type":"reviewersInvited","content":"","date":"2024-11-15T07:09:09+00:00","index":"","fulltext":""},{"type":"editorAssigned","content":"","date":"2024-11-05T07:08:47+00:00","index":"","fulltext":""},{"type":"checksComplete","content":"","date":"2024-11-04T08:47:25+00:00","index":"","fulltext":""},{"type":"submitted","content":"Discover Applied Sciences","date":"2024-10-21T22:49:27+00:00","index":"","fulltext":""}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"discover-applied-sciences","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"","sideBox":"Learn more about [Discover Applied Sciences](https://link.springer.com/journal/42452)","snPcode":"42452","submissionUrl":"https://submission.springernature.com/new-submission/42452/3","title":"Discover Applied Sciences","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Discover Series","inReviewEnabled":true,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"0b05c695-df18-4b13-81ae-0dcccab3c708","owner":[],"postedDate":"November 15th, 2024","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"under-review","subjectAreas":[],"tags":[],"updatedAt":"2025-04-03T09:08:45+00:00","versionOfRecord":[],"versionCreatedAt":"2024-11-15 17:51:14","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-5307180","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-5307180","identity":"rs-5307180","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}