Abstract
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.
Highlights
Product innovation is a major factor in a firm’s competitive advantage and survival and it is significant in turbulent environments
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
Building on the resource-based view and dynamic capability perspective, we provide an original perspective for an emerging country on the relationships among capabilities, product innovation for external markets, and overall performance
Summary
Product innovation is a major factor in a firm’s competitive advantage and survival and it is significant in turbulent environments. The general objective is analyzing the impact of single and interconnected capabilities on product innovation for external markets and, directly and mediated by innovation, on overall performance of Brazilian export firms. These kinds of innovation and performance were selected because the literature suggests that product innovation and export strategy complement each other (Cassiman & Golovko, 2011). We follow Golovko and Valentini (2011), who found robust empirical support for the hypothesis that the positive effect of innovative activity on a firm’s growth rate is higher for firms that engage in exports and vice versa To achieve such an objective, this paper adopts the perspectives of the resource-based view (RBV) and dynamic capability. This paper finishes with our conclusions, a discussion of the managerial and theoretical implications of results and suggestions for further research
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