Strategic flexibility and SME performance in an emerging economy

Purpose – This study aims to address the following question: when strategic flexibility can be most beneficial to small and medium enterprises (SMEs) in the context of emerging economies. Design/methodology/approach – Drawing on dynamic capabilities perspective, this study builds a contingency model and examines it with survey data collected from 166 SMEs in China. Findings – This study finds that the relationship between strategic flexibility and firm performance is extensively moderated by external (competitive intensity and environmental munificence), internal (resource combination activities), as well as bridging factors (managerial ties). Originality/value – The findings contribute to the contingency view of strategic flexibility and firm performance research by incorporating insights from the dynamic capabilities perspective and by expanding the scope of existing research to emerging economies.