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The Effects of Absorptive Capacity, Intellectual Property and Innovation in SMEs

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  • Luis Enrique Valdez Juarez
  • Elba Alicia Ramos Escobar
  • Gonzalo Maldonado Guzman

Abstract

The ability to learn and acquire knowledge has been one of the most important challenges for most companies, and especially for SMEs. The purpose of this study was to examine the effects of absorptive capacity on innovation, market orientation, and intellectual property management in SMEs. We also analyzed the influence of these variables on financial results in SMEs. The study was based on a sample of 412 companies in the industrial (manufacturing and agro-industry) and services (telecommunications and real estate) sectors operating in the Mexican Northwest. Data collection was carried out from June to October, 2014, using self-directed interviews with company managers. The estimation of relationships was tested by variance-based SEM statistical method with the PLS technique, using the SmartPLS software (version 3.2.6). Results showed that absorptive capacity has a significant influence on innovation and market orientation. Moreover, innovation and market orientation were found to have a significant influence on business profitability. No empirical support was found to explain the relationship between intellectual property management and absorptive capacity, innovation, and SME profitability. SME managers should continue with internal and external training of employees to strengthen their skills and knowledge. In addition, they must adopt and implement a business model that connects knowledge with intellectual property and innovation, through an R&D department, in order to increase profitability. With these actions the companies through their managers will have employees with greater skills, knowledge and with greater creativity. Leading to the SMEs to take advantage of its capabilities to develop new products, patent processes and products and protect their knowledge. It is also important for managers to continue to implement marketing strategies that allow them to become more competitive global markets. With the market focus companies can compete in global markets and achieve sustained profitability. This study is a contribution to absorptive capacity literature and to the resource-based view.

Suggested Citation

  • Luis Enrique Valdez Juarez & Elba Alicia Ramos Escobar & Gonzalo Maldonado Guzman, 2017. "The Effects of Absorptive Capacity, Intellectual Property and Innovation in SMEs," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 7(4), pages 36-50, December.
    • Handle: RePEc:ibn:jmsjnl:v:7:y:2017:i:4:p:36-50
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    More about this item

    Keywords

    absorptive capacity; innovation; market orientation; profitability; SME (Industrial and services sectors operating Mexican Northwest);
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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