Entrepreneurial Orientation and E-business Capabilities of Manufacturing SMEs: An Absorptive Capacity Lens

This research uses the absorptive capacity (ACAP) concept as a theoretical lens to study the effect of e-business upon the competitive performance of SMEs, addressing the following research issue: To what extent are manufacturing SMEs successful in developing their potential and realized ACAP in line with their entrepreneurial orientation? A survey study of 588 manufacturing SMEs found that their e-business capabilities, considered as knowledge acquisition and assimilation capabilities have an indirect effect on their competitive performance that is mediated by their knowledge transformation and exploitation capabilities, and insofar as these capabilities are developed as a result of a more entrepreneurial orientation on their part. Finally, the effect of this orientation on the SMEs' competitive performance appears to be totally mediated by their ACAP.