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Article history: Received: April 15, 2019 Received in revised format: April 27 2019 Accepted: May 11, 2019 Available online: May 11, 2019 This paper analyzes the effects of market orientation and innovation on competitive advantage and business performance. The method of collecting data is a designed questionnaire. The sample size is 150 textile SMEs in Selangor, Malaysia. Path analysis by operating SPSS 20.0 is used in analyzing the research. The result shows that market orientation and innovation had positive and significant effects on competitive advantage, partially. Market orientation and innovation give contributions to the competitive advantage of 46.3% while the rest of 54.7% are influenced by other variables which are not described in this study. Competitive advantage partially has a positive and significant influence on business performance. Market orientation and innovation also have significant effects on business performance both directly and indirectly through competitive advantage. Market orientation, innovation, and competitive advantage give contributions to the business performance of 58.4% while the rest of 41.6% are influenced by others variables which are not described in this study. © 2019 by the authors; licensee Growing Science, Canada

The effects of market orientation and innovation on competitive advantage and business performance of textile SMEs