The Microfoundations of Innovation Processes in Latin American Firms

ISI: The Microfoundations of Innovation Processes in Latin American Firms


2019 - Forthcoming - Academia Revista Latinoamericana de Administración


Purpose. The aim of this paper is to explore the microfoundations of innovation-enabling dynamic capabilities in Latin American firms. In particular, their processes to: (1) sense and shape opportunities, (2) seize opportunities, and (3) maintain competitiveness through reconfiguring assets. Design/methodology/approach. We carried out a confirmatory factor analysis (CFA) of survey data we obtained from a sample of 721 firms located in Latin America, and employed a hierarchical analysis of linear regressions with robust standard errors to test our hypotheses. Findings. We found that when firms manage their innovation processes based on (1) sensing opportunities and (2) reconfiguring their tangible and intangible assets, they are more likely to improve on four innovation-related outcomes: (1) development of new products and services, (2) profitability, (3) market share, and (4) diversification. Research limitation/implication. Our findings are limited to the specific context of Latin American countries. In particular, we took a random sample of firms from a business directory built by prestigious Latin American business schools, but that may not be representative. Therefore, the generalizability of our results is limited beyond the type of companies that are represented in that sampling frame. Originality/value. Contributions are twofold. First, we test the applicability of an orchestration model of dynamic capabilities to the Latin American context. And, second, we relate specific microfoundations of dynamic capabilities to the ability of firms to innovate successfully. 


Keywords: Latin America, Innovation processes, Business administration, Firm strategy

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