What does this research mean for the field?

In MSMEs, environmental conditions and technological readiness drive AI adoption, which subsequently improves multidimensional firm performance by fostering AI-driven innovation and enhancing competitiveness. Novelty: ClaimNovelty.INCREMENTAL. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

To examine how enablers of artificial intelligence adoption drive innovation, market competitiveness, and multidimensional firm performance across micro, small, and medium-sized enterprises.

August 22, 2026Benchmarking An International Journal

AI adoption and innovation in MSMEs for enhancing competitiveness and firm performance

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To examine how enablers of artificial intelligence adoption drive innovation, market competitiveness, and multidimensional firm performance across micro, small, and medium-sized enterprises.
Surveyed 268 micro, small, and medium-sized enterprises (MSMEs) in Malaysia.
Evaluated relationships using partial least squares structural equation modelling (PLS-SEM) with a disjoint two-stage higher-order construct approach.
Conducted necessary condition analysis (NCA) and importance-performance map analysis (IPMA) to detect operational bottlenecks and threshold requirements.
Technological readiness and environmental conditions are positively and significantly associated with AI adoption, whereas organizational support alone is insufficient to drive adoption.
AI adoption strongly associates with AI-driven innovation, which subsequently enhances firm competitiveness and multidimensional performance across technological, economic, and sustainability metrics.
Necessary condition analysis indicates that achieving high firm performance requires minimum threshold levels across technological readiness, environmental conditions, organizational support, AI adoption, innovation, and competitiveness.

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Implication

Cross-sectional survey demonstrates that AI adoption drives innovation and competitiveness in MSMEs, highlighting the need for technological readiness.

Cite This Study

Falahat et al. (2026) studied this question.

synapsesocial.com/papers/6a895facca7ade938187e8ae https://doi.org/10.1108/bij-05-2026-0433

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Implication

Cross-sectional survey demonstrates that AI adoption drives innovation and competitiveness in MSMEs, highlighting the need for technological readiness.

AI adoption and innovation in MSMEs for enhancing competitiveness and firm performance

Key Points

Discussion

Implication

Cite This Study

AI adoption and innovation in MSMEs for enhancing competitiveness and firm performance

Key Points

Discussion

Implication

Cite This Study

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