The impact of competitive strategy on enterprise performance: An empirical study of small and medium-sized manufacturing enterprises

Abstract

This study investigates the relationships between competitive strategy, innovation, corporate governance structure, capital structure, human capital, and enterprise performance in small and medium-sized manufacturing enterprises (SMEs). The research is based on the Competition Theory. The survey research design includes 506 valid responses from SMEs in China. Structural equation modelling was employed to analyze the responses. It revealed that competitive strategy positively impacts performance, with innovation and human capital as key mediators. Corporate governance and capital structure also mediate these relationships, supporting various strategic management theories. Additionally, the environment moderates the impact of competitive strategy on performance, highlighting the need for adaptability in dynamic markets. These findings offer theoretical substantiations and practical insights for enhancing SME performance through strategic planning. Future research should employ longitudinal approaches and integrate objective data to explore these dynamics further.