Managerial competencies and business performance: innovation as a mediator in Rwandan SMEs

Purpose The purpose of this study is to examine the mediating effect of innovation on the relationship between managerial competencies and business performance of small and medium enterprises (SMEs) in Rwanda. Design/methodology/approach A cross-sectional survey and quantitative methodological approach were used to collect the data. The bootstrap method was used to test mediation effects. Findings The findings revealed that innovation is a significant mediator in the association between managerial competencies and business performance. This study, therefore, adds new knowledge by stating that innovation toward business performance is a partial mediator in the relationship between managerial competencies and business performance of SMEs in Rwanda. Research limitations/implications Only a single research methodological approach was used. Qualitative studies through interviews could be undertaken to triangulate. Furthermore, the findings from the present study are cross-sectional. Longitudinal studies ought to be undertaken to examine the mediation effects studied to investigate any possibility of variations in the results. Practical implications The results may help owners-managers of SMEs to develop policies and strategies that could enable them to take advantage of new opportunities in relation to updated technology and cope with changes that may take place in the business environment to boost their business performance level. Originality/value To the authors’ knowledge, no research has ever been carried out on the mediating role of innovation in the relationship between managerial competencies and business performance of SMEs in Rwanda.