This article examines the impact of product, process and organisational innovations on two
alternative dimensions of business performance: finance and operations. Two indicators
capture financial performance: sales increase and production cost reduction. Operational firm
performance is captured by two alternative indicators: productive capacity augmentation and
quality improvement of product/service provided by the firm. Using a wide-ranging sample of
Spanish small- and medium-sized enterprises (SMEs), our findings highlight the significant impact of
innovation upon both these dimensions of business performance, although they differ regarding the
type of innovation and the performance indicator considered. Furthermore, our results indicate
that the relationship between innovation choices in SMEs and business performance should be
analysed from a multi-dimensional approach. These findings reveal significant implications for
innovation policies and strategies for SMEs.
