LAUSR

Abstract The paper seeks to develop a framework depicting the traits and profile of the innovation driven SMEs operating in the Italian manufacturing sector based on a detailed examination of the existent literature and the findings that emerged from an empirical study carried out within Italian manufacturing SMEs. Two broad research questions guided the empirical work that was carried out within the specific sector: (a) what variables characterize the behavior of the innovation driven firm? (b) what is the relationship (direct/indirect) between the firm’s dynamic capabilities and its networking abilities? The empirical evidence emerged from a quantitative research study of 3.500 Italian manufacturing SMEs. Graphical log-linear models were applied to understand the interactions of networking firms and their ability to innovate. The study’s findings support that those SMEs that are innovation driven, exhibit specific capabilities.