Capabilities, market and new product performance in Brazilian technology-based firms

Abstract

Purpose It should be highlighted that innovation is related to the absorption of knowledge, dynamicity and market orientation, with these elements seeking to aid efficiency, increasing firms’ competitive advantage. This study aims to gauge the influence of absorptive capacity, dynamic capability and market orientation on new product performance in Brazilian technology-based firms. Design/methodology/approach The study was characterized as quantitative, using primary data from Brazilian technology-based firms, as they are dynamic contexts that stimulate the absorption and exchange of knowledge and other organizational resources. It should be highlighted that this study received funding from the National Council for Scientific and Technological Development. The research hypotheses were empirically tested, confirming the relationship between dynamic capability and absorptive capacity, market orientation and new product performance. Findings Regarding the empirical contribution of the research results, it could be argued that for the purpose of improving performance in innovation, reflected in new product performance, companies need to develop strategies that correspond to market demand. Furthermore, these empirical findings provide an integrating view of the constructs and identify the importance of companies anticipating and responding to the demands of their customers quickly so that they can enjoy better performance. Therefore, companies need to adjust their processes, resources and capabilities to obtain better results, and for this, the involvement of managers is fundamental because they are the only ones with the clout to stimulate such initiatives. This approach favors recognizing and valuing absorptive capacity and dynamic capabilities and helps to identify new constructs such as responsive and proactive market orientation, which need to be adequately developed by managers to create competitive advantages that stem from better new product performance. Research limitations/implications A limitation of the study is that it does not address a specific analysis of the sector in which the technology-based firms (TBFs) under study operate. No tests were conducted regarding whether it is possible to perceive different structural paths for absorptive capacity, market orientation, dynamic capability and new product performance according to the sector of the TBFs. Practical implications Regarding the empirical contribution of the research results, it could be argued that for the purpose of improving performance in innovation, reflected in new product performance, companies need to develop strategies that correspond to market demand. Furthermore, these empirical findings provide an integrating view of the constructs and identify the importance of companies anticipating and responding to the demands of their customers quickly so that they can enjoy better performance. Therefore, companies need to adjust their processes, resources and capabilities to obtain better results and, for this, the involvement of managers is fundamental because they are the only ones with the clout to stimulate such initiatives. Social implications One of the main contributions of the study is that it provides an empirical demonstration that on its own absorptive capacity cannot boost new product performance. For this purpose, it needs to be combined with dynamic capabilities. Through this proposed model, it was possible to characterize the antecedent relationship of absorptive capacity and illustrate its relationship with dynamic capabilities. Another relevant theoretical contribution is the statistical proof of the positive relationship of both proactive and responsive market orientation with dynamic capability, and that dynamic capability has a positive influence on new product performance, which will generate better financial performance of TBFs. Originality/value As a contribution to the field, it was empirically demonstrated that on its own absorptive capacity cannot improve new product performance. For this to occur, it must be combined with dynamic capabilities. Through the proposed model, it is possible to characterize the antecedent relationship of absorptive capacity and illustrate its relationship with dynamic capability.