How do marketing, research and development capabilities, and degree of internationalization synergistically affect the innovation performance of small and medium-sized enterprises (SMEs)? A panel data study of Chinese SMEs

• We examines how marketing capability, R&D capability, and degree of internationalization influence innovation performance of SMEs.
• The results indicate that internationalization has a positive effect on innovation performance when SMEs' R&D capability or marketing capability is high.
• We also find that the effect of internationalization on innovation performance is negative when R&D capability or marketing capability is low.
• The results show that marketing capability positively strengthens the effect of R&D capability on innovation performance.

This research examines how the marketing and research and development (R&D) capabilities as well as degree of internationalization influence the innovation performance of SMEs (small and medium-sized enterprises). SMEs are often considered the backbone of, and hence are of critical importance to, a large number of economies worldwide. A theoretical framework is developed by integrating insights from international new venture and marketing theory. We provide empirical evidence using panel data to test our models. The results indicate that internationalization has a positive effect on innovation performance when SMEs’ R&D capability or marketing capability is high. Notably, however, we find that the effect of internationalization on innovation performance is negative when R&D capability or marketing capability is low. Moreover, the results show that marketing capability not only positively strengthens the effect of R&D capability on innovation performance, but critically also further strengthens the impact of internationalization on innovation performance.