REVISITING THE EFFECTS OF TECHNOLOGICAL INNOVATION ON SME FINANCIAL PERFORMANCE IN A POST COVID-19 CONTEXT AND DURING THE RUSSIA-UKRAINE WAR: EVIDENCE FROM CAMEROON

Abstract

This study evaluates the effects of technological innovation on the financial performance of Cameroonian SMEs in the dual contexts of the COVID-19 pandemic and the Russian-Ukrainian war. Using data from a survey of 1,358 enterprises across eleven major cities and eight regions in Cameroon, the analysis employed the Propensity Score Matching approach to address potential selection bias inherent in quasi-experimental designs. The findings reveal that technological innovation significantly improves financial performance metrics, particularly productivity, net profit margin and business competitiveness. These results were further supported by robustness checks using subjective measures, including sales and profit growth. Moderation analysis highlights the role of the COVID-19 pandemic and the Russia-Ukraine war, indicating that SMEs should integrate contextual factors in their innovation efforts to enhance financial outcomes. The study recommends policy measures to foster SME innovation capacity, such as industrial cluster development and university-industry collaboration. Entrepreneurs are encouraged to adopt strategies like cultivating innovation-friendly cultures, investing in research and development, and integrating contextual factors in their innovation efforts.