AbstractsEconomics

<strong>Purpose</strong> - The purpose of this paper is to explore the relationship between knowledgesources, knowledge capacities, and business model innovation in small medium-sizeenterprises (SMEs) and discover the specific pattern among the three groups. <strong>Design/methodology</strong> - A total of 103 SMEs' CEOs, entrepreneurs and seniormanagers provide the samples for exploratory factor analyses and multiple regressionanalyses. The data is collected by self-completion survey based on perceptualmeasurement of constructs and also referred to objective data from companies' annualreports. <strong>Findings</strong> - The results indicate a significant relationship between knowledge sources,capacities and business model innovation. External knowledge interaction associatedwith the business network is positively contributed to business model innovation.Information system integration is directly related to business model innovation andmediates in the link between individual knowledge and business model innovation. Thebetter understanding of customers is also positively related to achieving a successfulbusiness model innovation. SMEs identify knowledge sources, develop knowledgecapacities and apply them specifically in different phases of business modelinnovation. <strong>Practical implications</strong> - To confront the big enterprises' sufficient knowledge, thisstudy inspires entrepreneurs and leadership of SMEs with the possibility of businessmodel innovation. By integrating and implementing the knowledge from external andinternal, SMEs can intentionally enable to map the phases of business modelinnovation, reach the helpful resources, proactively recognize the challenges andfinally achieve a competitive business model.Research <strong>limitations/implications</strong> - The confirmatory bias might miss out on thephenomenon occurring and the findings are still generally for direct application to aspecific situation. More focused case studies will be suggested in the future to furtherinvestigate the reality differing from individuals, strategies, sectors and nat ions. Inaddition, longitudinal studies with less time restriction will be feasible to understandhow knowledge and business model interact with each other. <strong>Originality/value</strong> - This study pioneers a measurement of success in business modelinnovation and a justification of overall influence of knowledge on business modelinnovation. By further implementing, some of the results testify the originality'svalidity in SMEs, others present exceptional findings beyond the previous theories.