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The performance of small and medium-sized enterprises (SMEs) in Malaysia's manufacturing sector was the main emphasis of the current study. The Malaysian economy has suffered because of the manufacturing sector's SMEs' poor performance and low GDP. Thus, this conceptual research aims to explore the correlation between enterprise risk management capabilities and firm performance. The research also examines the mediating role of innovation capabilities between enterprise risk management capabilities and firm performance. Present research revealed comprehensive discussion on how enterprise risk management capabilities impact firm Malaysian manufacturing SMEs' firm performance. This research highlighted the key value of enterprise risk management capabilities on firm performance for the consideration of the owner/managers of Malaysian SMEs in the manufacturing sector. In addition, Resource-Based View (RBV) theory was employed in this research to examine the impact of enterprise risk management capabilities on firm performance and the mediation impact of innovation capabilities between enterprise risk management capabilities on firm performance. The research used systematic literature to build its conceptual model. Based on the conceptual model build; present research theorised that the is a positive relationship between ERM (IC and FP); There is also a positive relationship between IC and FP. In addition, the research posits that IC mediate the relationship between ERM and FP. There are several implications of this conceptual framework for theory and practice are discussed. Future research should conduct an empirical testing to analyse the results.
Shibli et al. (Sun,) studied this question.