Firm capabilities and the performance in regional polarization

Abstract

Purpose – The purpose of this paper is to study the effect of firm-specific capabilities on performance in regional polarization. Design/methodology/approach – The study develops and tests a theoretical model relating regional economic characteristics and firm-specific capabilities to performance. Based on a survey conducted by the World Bank, data on 17,196 firms in 20 Latin American countries were constructed and analysed. Findings – The performance impacts of a firm's operations capability, technological capability and marketing capability were all found to be strengthened by operating in the Brazil-group economies – more favorable economic environments. Research limitations/implications – The findings confirm empirically that regional polarization has an important influence on firm performance. Moreover, these findings suggest a more nuanced understanding of the effects of firm-specific capabilities on firm performance. Some types of economies foster the effects of firm-specific capabilities and offer...