Asia Pacific University Library catalogue

A dissertation submitted to the Faculty of Business at Asia Pacific University of Technology and Innovation in partial fulfilment of the requirement for the degree of Master of Business Administration (UCMF1808MBA)

It is widely recognised that small and medium-sized enterprises (SMEs) make meaningful contribution towards social and economic development. Therefore, performant SMEs is desirable for any country and for that matter innovation is a vital element as well as conducive environmental factors. Unfortunately, studies related to SMEs in the Small Island Development States (SIDS) are scarce with the Seychelles being no exception. Thus, the general objective of this research is to contribute towards the literature relating to the relationship between the external factors, innovation and SME performance particularly in the context of Seychelles. Consequently, the specific research objectives of this research pertained to: examining the relationship between the external factors (government policy, financial access, environmental dynamism, technology) and SME performance; to examine the relationship between the external factors (government policy, financial access, environmental dynamism, technology) and innovative output; to examine the relationship between innovative output and SME performance; to examine the mediating effect of innovative output between the external factors (government policy, financial access, environmental dynamism, technology) and SME performance. A review of the literatures was used to build a conceptual model of the research. In accordance with the specific objectives, two sub models were used to direct regression analysis of the hypotheses drawn from the research questions. The data was collected through a survey (sample size 300 SMEs) for which the response rate was 77.7 percent from the SMEs in Seychelles. The results of the regression analysis performed using the data collected suggests that financial resources, environmental dynamism and technology have significant influence on innovative output. Whereas the influence of government support on innovative output was not found to be significant. Moreover, significant influence of government policies and technology on SME performance was also determined whereas financial resources and environmental dynamism did not have significant effects on SME performance. Also, the findings showed that innovative outputs significantly mediate the relationship between the variables (government support, environmental dynamism, technology) and SME performance. Whereas no significant mediation effect of innovative output between financial resources and SME performance could be established. The study makes significant contribution to the knowledge related to innovations and SME performance as very little existing literature currently exist on this topic for the SIDs and non could be obtained about the Seychelles. This highlight the importance of this contribution of this study which, optimistically, will provide much insight to the entrepreneurs, policy makers and future researchers.