Capabilities, Innovation, and Overall Performance in Brazilian Export Firms

Abstract

This article extends the current research on innovation by investigating the relationship between innovative capabilities and export firms’ overall performance. From the perspectives of the resource-based view (RBV) and dynamic capability, we examine the differential and interactive effects of exploration and exploitation capabilities in product innovation for external markets and overall performance (direct and mediated by a new product). In addition, we test the moderating effect of market dynamism and the controlling effect of firm size on these relationships. Hence, the main contribution of this article is developing and empirically testing an original model, by combining these constructs that address new relationships, in an emerging country. This model was tested with data from 498 Brazilian export firms, distributed throughout all Brazilian manufacturing sectors, by firm size, and in states. The analysis was made with application of the structural equation modeling (SEM). As a result, we found support for the assumptions that exploitation capabilities influence product innovation and overall performance, whereas exploration capabilities and their interaction to exploitation capabilities influence overall performance, but not product innovation. Additionally, the relationship between exploitation capabilities and overall performance is mediated by product innovation. Unlike hypothesized, market dynamism does not moderate the relationship between product innovation and overall performance. Furthermore, firm size works as a controlling variable in the relationships analyzed. Regarding the implications for theory, this study contributes to grasp that exploitation capabilities influences a firm’s overall performance, both directly and indirectly (via product innovation), and highlights the various direct and mediatory effects of innovation on overall performance. These insights show the importance of considering the role of mediating and moderating variables in theory and research models that address the determinants of overall performance to avoid overestimation of certain constructs. Finally, the paper provides original empirical support for the hypothesis of the interdependency of product innovations for external markets and overall performance.

Corporate governance, dynamic capabilities and business performance in companies listed in Brasil, Bolsa, Balcão S/A (B3 S/A)

“…Similar to previous studies (Cabral et al, 2015;Cao, Gedajlovic, & Zhang, 2009;Jansen, Van Den Bosch, & Volberda, 2006;Lisboa, Skarmeas, & Lages, 2013;O'reilly & Tushman, 2013;Wei et al, 2014), the result confirming the positive effect of DCs on the performance of companies listed in B3 S/A shows that, overall, investments in DC development enable BP improvement in Brazilian companies. Therefore, this outcome shows the importance of developing the skills and capabilities of these companies to (re)configure their assets/resources in order to adapt them to dynamic changes in the Brazilian market and to search for the appropriate improvement of their business performance (Eisenhardt & Martin, 2000;Teece, 2007Teece, , 2009Teece et al, 1997).…”

“…These authors found that the ambidextrous capability is related to company performance measured through a scale based on sales increase, on greater participation in the market, on gross ROE and on return in total assets. Based on exams in the direct and interactive effects of capabilities, either "exploitation" or "exploration", on product innovation for foreign markets and on general company performance, Cabral, Coelho, Coelho and Costa (2015) used data from 498 Brazilian exports companies in their research and concluded that exploitation capabilities influence product innovation and global performance (ambidexterity), whereas exploration capabilities, and their interaction with the exploitation ones (ambidexterity), influence the overall performance rather than product innovation.…”

“…Thus, among other possibilities, such as non-linear relationships, it is possible to find DC's moderating and/or mediating function in the CG -BP relationship. Cabral et al (2015) found that the relationship between exploitation capabilities and global performance is mediated by product innovation. Therefore, the present study contributes to the theory by defining how exploration capabilities influence general performance, either directly or indirectly, through product innovation.…”

Innovation, Cross-Functional Team Effectiveness and Firm Performance: An Integrated Framework for Thai Automotive Industry

“…Firms' resources and capabilities are the main determinants of firms' performance [30] and they are important in providing and sustaining their competitive advantage [31]. From a performance point of view J. D. E. O. Cabral et al reviewed several studies and summarized that firms typically develop and apply knowledge and skills that make them more innovative and increase their overall performance [32].…”

The Analysis of Young Entrepreneurs’ Performance in the Milkfish Presto MSMEs in Semarang, Indonesia

“…External problems faced by MSMEs include the high transaction costs due to unfavorable business climate, scarcity of raw materials, technology, government policies as well as the acquisition of formal legality which is still a fundamental problem for MSMEs in Indonesia. Cabral et al, (2015) states that the factors that determine the capability of a business network are innovation. Innovation, which is one of the three dimensions of entrepreneurial orientation, is closely related to the ability to apply creativity in order to solve problems and opportunities to improve and enrich life.…”