DYNAMIC CAPABILITIES AND INNOVATION IN SMALL AND MEDIUM-SIZED ENTERPRISES (SMES): A SYSTEMATIC LITERATURE REVIEW OF PRIOR STUDIES

Abstract

Based on previous studies, this study presents the role of dynamic capabilities and innovation in maintaining a competitive advantage for SMEs. This article is based on a literature review. Forty articles from JSTOR databases were selected for the study. The study period is between 2011 and 2020, and the PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) method was used. The results show that despite the contribution of Asian countries, almost 70% of studies on dynamic capabilities and innovation in SMEs in the Global North are conducted in Europe. Less attention has been paid to the Global South, which depends more on SMEs than large companies to enrich the economy. This study provides a clearer picture of the ideas through an empirical application that complements current vague notions. The author argues that more research needs to be done on dynamic capabilities and innovation in SMEs in the Global South.