DETERMINANTS OF INNOVATION IN MICRO AND SMALL ENTERPRISES: A MANAGEMENT APPROACH

Abstract

The article sought to evaluate the impact of management factors on the innovation capability of micro and small enterprises (SMEs). A total of 315 SMEs were analyzed in Pernambuco in the period 2015– 2016. The following internal factors were considered: leadership, people management, information and knowledge, customer relationship, business-society relationship, results, age, and size. The innovation capability was measured by the degree of sectoral innovation. The relationships were analyzed by means of multiple linear regression and data envelopment analysis. The results demonstrated that leadership, information and knowledge, customer relationships, and society positively influence innovation capability and its efficiency.