SMEs in the Arab region are widely viewed as important for their multiple roles, notably in employment creation. Yet, they consistently encounter several constraints such as financing, which impede innovation, growth and internationalisation. This paper examines the external finance-innovation nexus for SMEs operating in five non-oil Arab countries—Egypt, Jordan, Lebanon, Morocco and Tunisia. To achieve this, a probit regression with instrumental variables is applied to firm-level data from the World Bank Enterprise Surveys. The primary findings reveal that the external finance providers are more likely to be reluctant to fund SMEs’ innovation; yet, it thrives with finance. The findings accord with the hypothesis that the accessibility to external funds is a mainstay of SMEs’ innovation. There is a need to develop policies that support equity and debt capitals for innovative SMEs.

阿拉伯地区的中小型企业因其多重作用而被广泛认为是重要的，特别是在创造就业方面。然而，它们始终遇到诸如融资之类的若干障碍，这些障碍阻碍了创新，增长和国际化。本文研究了在五个非石油阿拉伯国家（埃及，约旦，黎巴嫩，摩洛哥，突尼斯）经营的中小企业的外部金融创新关系。为此，将带有工具变量的概率回归应用于来自世界银行企业调查的公司级数据。主要发现表明，外部融资提供者更不愿为中小企业的创新提供资金。然而，它在金融领域蓬勃发展。这些发现符合以下假设：获得外部资金是中小企业创新的支柱。