The role of market orientation and innovation capability in export performance of small- and medium-sized enterprises: a Latin American perspective

Abstract

Purpose This study aims to extend the existing base of knowledge of proactive and reactive market orientation and innovation capability by testing their impact on the export performance of emerging-market small- and medium-sized enterprises (SMEs) in a Latin American context. Design/methodology/approach This paper is a replication study, and its data were collected through a survey answered by general, marketing, sales or export managers at 155 Mexican SMEs. The research model was tested using partial least squares. Findings The study results indicate that innovation capability and reactive market orientation are drivers of export performance in Latin American SMEs. Moreover, proactive market orientation has been found to have an indirect effect on export results. Practical implications This study highlights to managers of Latin American SMEs the importance of capability development and deployment to improve export performance. Social implications SMEs enabled by strategic and technological innovation based on current and latent customer needs can advantageously perform in foreign markets and can drive economic growth and social and human development in Latin America. Originality/value Recent studies have focused on emerging-market enterprises and the necessity of developing dynamic capabilities to achieve internationalisation. This study extends previous research by assessing the robustness and generalizability of drivers in export performance for manufacturing SMEs in Latin America. In particular, it provides empirical insights on the capabilities to develop by Latin American SMEs to achieve better export performance.

Drivers of business model innovation in micro and small enterprises: evidence from Egypt as an emerging economy

“…Previous researchers confirmed a relation among intensity, types of market orientation and degrees of innovation [ 40 , 49 , 50 , 54 , 61 , 78 ]. Both orientations are core requirements for competitive advantage and have proved a positive impact on innovation and BMI [ 30 , 78 , 80 , 86 , 89 ], Based on the above theoretical arguments, the researchers propose the following hypotheses:…”

“…Reactive MO is market-driven which accepts market changes as given and displays more exploitative behavior through focusing on customers' existing needs and, accordingly, their reactions. As for proactive MO, it is market-driving which focuses on customers' latent and future needs through exhibiting more explorative behavior and developing new knowledge about the firm's markets, products, and capabilities [ 49 , 68 ]. Building on previous discussion, the researchers propose that:…”

Do contingencies matter between organizational capabilities and SME export performance?

“…Likewise, previous studies have found relevant determinants of SMEs' EP in other export-drive countries, such as Thailand (Theingi, 2011), Vietnam (Safari and Saleh, 2020), Malaysia (Singh and Mahmood, 2014), Mexico (Acosta et al, 2018;Kolbe et al, 2021), Portugal (Sousa and Bradley, 2009;Prange and Pinho, 2017;Ribau et al, 2017;Rua et al, 2018) and Austria (Fuchs and Köstner, 2016). For instance, Theingi (2011) investigated the influence of SMEs' resources and export intermediary resources on EP using the RBV.…”

International performance of Latin American companies: institutional and reputational perspectives

“…Torkkeli and Fuerst (2018) studied the impact of the normative, regulative and cognitive structures on the IP of Colombian small and medium-sized enterprises (SMEs). Kolbe et al. (2021) explored how knowledge of proactive and reactive market orientation and innovation capability influence the Mexican SMEs’ IP.…”

“…Torkkeli and Fuerst (2018) studied the impact of the normative, regulative and cognitive structures on the IP of Colombian small and medium-sized enterprises (SMEs). Kolbe et al (2021) explored how knowledge of proactive and reactive market orientation and innovation capability influence the Mexican SMEs' IP. Furthermore, Losilla Solano et al (2019) point out that product diversification has a positive effect on firm's IP, and Bianchi et al (2017) presented that international entrepreneurial opportunity recognition and international networks mediate the relationship between international entrepreneurial orientation and Internet technology capabilities of SME performance.…”