Research underlined that Small and Medium Enterprises’ performance is enhanced by different types of innovation capabilities. This research tends to present a comprehensive model to explain the relationship between innovation capabilities and SMEs’ financial and operational performance. Specifically, this study tends to achieve three objectives: explores the set of product, process, organizational and marketing innovation capabilities possessed by owners/managers of SMEs and their impact on Chinese manufacturing SMEs’ operational and financial performance dimensions, identify the determinants of innovation capabilities, and determine the contextual factors that moderate innovation capabilities and SMEs’ performance. This research employed a qualitative research method using in-depth interviews with eight owners/managers of Chinese manufacturing SMEs. Research findings revealed that product and marketing innovation capabilities have a significant impact on SMEs’ financial performance while process and organizational innovation capabilities positively influence SMEs’ operational performance. The major determinants of innovation capabilities involved availability of sufficient organizational resources, entrepreneurial orientation, knowledge development and external networks. The contextual moderating factors on the relationship between innovation capabilities and SMEs’ performance involved internal factors which are: SME size, SMEs’ owner/manager work experience, entrepreneurial mindset; and external factors: market dynamism and cooperation strategies. This paper ends by drawing some concluding remarks and proposing future research avenues.

International business research presents a broad consensus on the importance of dynamic capabilities in the internationalization of SMEs. However, there is a lack of research on assessing the impact of dynamic capabilities and the level of SMEs’ internationalization operating in a turbulent and dynamic business environment. This study examines the impact of environmental dynamism and three sets of dynamic capabilities, namely, sensing, seizing, and reconfiguring capabilities on internationalized SMEs’ geographic scope. In addition, this research examines the association between internationalized SMEs’ characteristics: SME’s age, size, and SME owner/manager’s international experience and SMEs’ geographic scope. This study used a quantitative research and employed survey questionnaires to collect data from 305 internationalized Malaysian manufacturing SMEs. Anova tests and Chi Square tests were employed to analyze data collected from respondents using SPSS. Research findings revealed that environmental dynamism and dynamic capabilities have a significant impact on internationalized SMEs’ geographic scope, however, none of the internationalized SMEs’ characteristics had a significant relationship with their geographic scope. The result of this research suggest internationalized SMEs owner/managers need to possess sensing, seizing and reconfiguring capabilities, and monitor business environmental dynamism to increase their geographic scope. This paper ends with drawing a set of concluding remarks and recommendations.