A Causal Model on the Performance of SMEs as a Function of Learning Orientation, Innovation Capability, and Organizational Agility in Region XI

Ma. Erwynnah E. Caraoa; Rosalia T. Gabronino

doi:10.36948/ijfmr.2026.v08i03.77642

A Causal Model on the Performance of SMEs as a Function of Learning Orientation, Innovation Capability, and Organizational Agility in Region XI

Author(s)	Ma. Erwynnah E. Caraoa, Rosalia T. Gabronino
Country	Philippines
Abstract	This research seeks to establish a causal model for successful SME performance in Davao Region based on three determinants: learning orientation, innovation capabilities, and organizational agility. A stratified random sample of 255 business owners and managers in the Davao region was drawn from the larger population to determine both the degree of the impact of these three independent variables on the dependent variable, SME performance. A descriptive correlational research design and a structural equation model were used to analyze the data. Statistical analytic techniques such as mean, regression analysis, and structural equation modelling were applied to determine the levels, influence, and overall best fit of the independent variables toward the dependent variable. The results of the study revealed that respondents represent a very high level of learning orientation and high levels of innovation capability, organizational agility, and SME performance. The results also showed that innovation capability has the greatest statistical influence on SME performance. Further analyses demonstrated that while learning orientation and organizational agility exhibit positive relationships with SME performance, they are not statistically significant predictors. The modified higher-order construct model was identified as the best fit, confirming that the combined impact of learning orientation, innovation capability, and organizational agility explains SME performance. Therefore, the significance of this research is that it provides empirical evidence that should assist SME owners, managers, and other policy-makers in formulating innovation-driven strategies that can enhance SME performance and improve the competitiveness of SMEs in the Davao region.
Keywords	business administration, learning orientation, innovation capability, organizational agility, performance, causal model, Philippines
Field	Business Administration
Published In	Volume 8, Issue 3, May-June 2026
Published On	2026-05-08
DOI	https://doi.org/10.36948/ijfmr.2026.v08i03.77642

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A Causal Model on the Performance of SMEs as a Function of Learning Orientation, Innovation Capability, and Organizational Agility in Region XI

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