Thesis (MSc) - Cyprus International University. Institute of Graduate Studies and Research Management Informations Systems Department

Includes bibliography (sheets 40-47)

ABSTRACT In today's ever-changing and uncertain business environment, the dynamic capabilities of a firm provide it with opportunities to remain competitive and perform. In this mechanical period, SMEs are unavoidably urgent for economic growth as SMEs will more often than not affect the general economy by creating new job opportunities, improving living standards, and eliminating inefficient income distribution, which provides a foundation for economic advantage to the whole nation. As such, the success of small and medium-sized enterprises (SMEs) depends on dynamic capabilities. Even though research has shown that firm performance is significantly and positively influenced by dynamic capability, our knowledge of the underlying mechanism through which firm performance is affected by IT capabilities is not yet clear. This study examines the intervening role of absorptive capacity in this relationship through the application of the dynamic capability view. Data were collected from 200 respondents in medium-sized manufacturing sector SMEs in Cameroon We analysed the research hypotheses through the structural equation modelling method by using the Smart-PLS software. The research findings show that absorptive capacity partially mediates the relationship between IT capabilities and firm performance. Furthermore, the direct path relationship between capabilities and firm Performance is highly significant as compared to other paths. Keywork: Absorptive capacity, Firm performance, IT capabilities and SMEs