Abstract
Governments, in order to safeguard their SMEs from the negative effects of resource shortages, design technological support programs for clustered firms. This study is designed to investigate the country-wide effect of the CFC program on the competitiveness of manufacturing SMEs by taking into consideration the role of SMEs’ dynamic capabilities in harnessing greater competitive benefits from this technological support program. Previous studies have rarely deployed the country level survey to investigate such effects. The study hypothesized that H-1; the use of CFC program enhances SMEs’ production, innovation, internationalisation and financial competitiveness, and that H-2; SMEs’ absorptive capacity (ACAP) and networking capability (NCAP) moderate the effect of the CFC program on their competitiveness dimensions. The study conceptualised competitiveness into four distinct dimensions and adopted a rigorous multi-step process to collect objective, subjective, and cross-validated data from multiple sources in the 22 CFC centres (all over Pakistan) from 224 user SME firms. Findings reveal that the use of the CFC program has a significant positive effect on all dimensions of competitiveness of user SMEs. However, ACAP and NCAP of user firms do not play any role in harnessing the effect of CFC program use on any of the competitiveness dimension. Important theoretical and policy insights and implications are drawn from both the significant and non-significant findings.