The Impact of Absorption Capability, Innovation Capability, and Branding Capability on Firm Performance—An Empirical Study on Vietnamese Retail Firms

Abstract

This study aims to explore the impact of absorption capability, innovation capability, and branding capability on the performance of retailers. Using the resource-based view (RBV), this study proposes a research model on the direct impact of absorption capability, innovation capability, and branding capability on firm performance as well as the indirect impact of absorption capability on firm performance which is mediated by both innovation capability and branding capability. By surveying 201 middle and senior managers representing 201 Vietnamese retailers, PLS-SEM was used to test the hypotheses. The research results show the important role of developing innovation capability and branding capability in improving retailer performance. The findings also reveal the significant impact of absorption capability on retailers by an indirect mechanism through innovation capability and branding capability. Based on the findings, practical implications for Vietnamese retailer managers are suggested to improve their performance by strengthening and developing absorption capability, innovation capability, and branding capability.