THE IMPACT OF KNOWLEDGE MANAGEMENT CAPABILITY ON THE INNOVATION PERFORMANCE OF SMALL AND MEDIUM-SIZED ENTERPRISES IN HUNAN PROVINCE, CHINA

Abstract

This research aims to investigate the influence of knowledge management capability on the innovation performance of small and medium-sized enterprises (SMEs) within Hunan Province of China. We aim to shed some light on the consequences of Knowledge Management capability on innovation and performance of SMEs. According to the literature review, we develop a research model showing a positive relationship between knowledge management capability and innovation performance. Using data from 300 enterprises within Hunan Province. Based on the Structural Equation Model (SEM) results by Partial Least Square (PLS) method, research hypotheses were supported. Results show that KM capability impact innovation performance directly. It is found that knowledge production capability, knowledge conversion capability and knowledge application capability facilitate innovation and performance. Findings presented in this paper may help academics and managers in designing KM activities programs to achieve higher innovation and effectiveness.