Abstract
Literature reflects that Latin America and the Caribbean register more SMEs and produce more entrepreneurial activity than any other place in the world. Using the Theory of Resources and Capabilities, this research explored how SMEs in Costa Rica, Puerto Rico, and the Dominican Republic managed the heterogeneity of their entrepreneurial orientation, market orientation, social and human capital resources and their impact on innovation capacity and competitiveness. With a survey of 467 SMEs and the analysis of data with the use of PLS-SEM & PLS-MGA, this study contributed new information based on resources and capacities that showed the maximum set of possible variables analyzed for a theoretical understanding and practice of the heterogeneity of resources. The results reflected a positive impact on the proposed hypothesis through the structural model. The data highlight market orientation as the most valuable resource that facilitates innovation and competitiveness in SMEs analyzed. The results revealed and contributed to the new lines of research on how differences and the degree of importance in managing resources generated high competitiveness through their capacity for innovation.
Highlights
The analysis began by observing whether the heterogeneous effect of the entrepreneurial orientation (EO) resources (β = 0.48; t = 24.181), market orientation (MO) (β = 0.36; t = 27.617), human capital (HC) (β = 0.13; t = 17.375) and social capital (SC) (β = 0.22; t = 23.139) maintained a positive impact (H1 β = 0.72; t = 35.345) on the small and medium-sized enterprises (SMEs) innovation capacity of Costa Rica (CR), Puerto Rico (PR), & Dominican Republic (DR)
The results showed support for H1 & H3. These results demonstrate that there is a strong relationship through variable resources and variable innovation (β = 0.72) and, in the same way, another strong relationship between innovation and competitiveness (β = 0.72)
Preliminary results showed no significant differences between CR, PR & DR to be compared (Table 5)
Summary
The Theory of Resources and Capabilities analyzes how companies use rare, valuable, and inimitable resources (Cruz, 2018; García et al, 2018; Miller & Breton, 2017; Reynoso et al, 2017) in order to increase their capacity to achieve competitive advantages through their strategic adjustment (García et al, 2018; Miller & Breton, 2017; Reynoso et al, 2017). Arroyo (2008) argues that SMEs in Latin America and the Caribbean face an external environment of great uncertainty and high competitiveness. This level of uncertainty is related to financial crises, globalization, political and social instability, among other factors, which promote the availability of various business alternatives (Venegas, 2008; De Arruda, 2009). The capacity for innovation is recognized as a key factor in achieving the competitiveness of SMEs. it is recognized that the capacity for innovation will be based on the use of resources. Even Fong Reynoso et al (2017) highlight the need for studies that analyze factors such as innovation on resources and capacities in SMEs in Latin America and the Caribbean
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