Capabilities and Innovative Performance in the Brazilian Agricultural Machinery Industry

Abstract

Purpose -This study identifies how Brazilian agricultural machinery manufacturers combine different capabilities to innovate. This industry has the potential to increase productivity in agriculture, a sector that is notably relevant in Brazil, one of the main food and agricultural commodities producers in the world.Theoretical framework -Firms were approached through the lens of a four innovation capabilities model (development, operations, management and transactions). Previous research about innovation in the machinery and equipment industry was examined in depth to support the results obtained.Design/methodology/approach -To identify the combinations of innovation capabilities, the fuzzy-set QCA (comparative qualitative analysis) technique was applied. Data were collected through a survey, conducted with 103 Brazilian companies. Findings -Agricultural machinery manufacturers innovate through two combinations of capabilities: development, operations and management (DC*OC*MC), or operations and transactions (OC*TC). Innovation emerges when excellence in manufacturing is complemented by improvements in existing products and in managerial processes (DC*OC*MC), or in negotiation skills and commercialization processes (OC*TC).Practical & social implications of research -Previous research had already identified that the machinery and equipment industry of emerging economies is focused on production-related enhancements. However, the present study demonstrates that this is not sufficient for firms to innovate. As a practical implication, we indicate two paths for agricultural machinery companies to achieve high innovative performance.Originality/value -Research about innovation in the machinery and equipment industry generally aims to only understand how firms develop new products and production processes. This study fills a gap by approaching this industry through broader lenses, demonstrating the relevance of new managerial and transactional process development for these firms.

Social, environmental, and economic dimensions of innovation capabilities: Theorizing from sustainable business

“…To minimize such complexity, rather than adopting a meta‐capability per company, we advocate using different innovation capabilities to study sustainability at the business level. This rationale aligns with recent studies adopting a set of innovation capabilities to analyze a firm's innovative behaviors (Ostermann et al, 2022; Pufal & Zawislak, 2022; Ruffoni & Reichert, 2022).…”

“…We interviewed the owners of the companies because they have comprehensive knowledge of operations and strategic decisions regarding innovation and sustainability. Previous studies on innovation capabilities also applied a questionnaire with only one owner or director per company (e.g., Alves et al, 2017; Ostermann et al, 2022; Pufal & Zawislak, 2022; Reichert et al, 2016; Ruffoni & Reichert, 2022), a common practice in the field. The interviews took place face‐to‐face and online.…”