IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i11p6422-d822946.html
   My bibliography  Save this article

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

Author

Listed:
  • Linh Nguyen Phuong

    (Business Administration Faculty, Thuongmai University, Hanoi 122868, Vietnam)

  • Khanh Cao Tuan

    (Marketing Faculty, Thuongmai University, Hanoi 122868, Vietnam)

  • Nhuan Nguyen Duc

    (Business Administration Faculty, Thuongmai University, Hanoi 122868, Vietnam)

  • Uyen Nguyen Thi

    (Business Administration Faculty, Thuongmai University, Hanoi 122868, Vietnam)

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.

Suggested Citation

  • Linh Nguyen Phuong & Khanh Cao Tuan & Nhuan Nguyen Duc & Uyen Nguyen Thi, 2022. "The Impact of Absorption Capability, Innovation Capability, and Branding Capability on Firm Performance—An Empirical Study on Vietnamese Retail Firms," Sustainability, MDPI, vol. 14(11), pages 1-17, May.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:11:p:6422-:d:822946
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/11/6422/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/11/6422/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bruce Kogut & Udo Zander, 1992. "Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology," Organization Science, INFORMS, vol. 3(3), pages 383-397, August.
    2. Milé Terziovski, 2010. "Innovation practice and its performance implications in small and medium enterprises (SMEs) in the manufacturing sector: a resource‐based view," Strategic Management Journal, Wiley Blackwell, vol. 31(8), pages 892-902, August.
    3. Erwin Danneels, 2008. "Organizational antecedents of second‐order competences," Strategic Management Journal, Wiley Blackwell, vol. 29(5), pages 519-543, May.
    4. Jansen, J.J.P. & van den Bosch, F.A.J. & Volberda, H.W., 2005. "Managing Potential and Realized Absorptive Capacity: How do Organizational Antecedents matter?," ERIM Report Series Research in Management ERS-2005-025-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    5. Leal-Rodríguez, Antonio Luis & Eldridge, Stephen & Roldán, José Luis & Leal-Millán, Antonio Genaro & Ortega-Gutiérrez, Jaime, 2015. "Organizational unlearning, innovation outcomes, and performance: The moderating effect of firm size," Journal of Business Research, Elsevier, vol. 68(4), pages 803-809.
    6. Neil A. Morgan & Douglas W. Vorhies & Charlotte H. Mason, 2009. "Market orientation, marketing capabilities, and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 30(8), pages 909-920, August.
    7. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    8. Gunday, Gurhan & Ulusoy, Gunduz & Kilic, Kemal & Alpkan, Lutfihak, 2011. "Effects of innovation types on firm performance," International Journal of Production Economics, Elsevier, vol. 133(2), pages 662-676, October.
    9. Steve Burt & Ulf Johansson & John Dawson, 2016. "International retailing as embedded business models," Journal of Economic Geography, Oxford University Press, vol. 16(3), pages 715-747.
    10. Richard Arend, 2014. "Entrepreneurship and dynamic capabilities: how firm age and size affect the ‘capability enhancement–SME performance’ relationship," Small Business Economics, Springer, vol. 42(1), pages 33-57, January.
    11. Ewing, Michael T. & Napoli, Julie, 2005. "Developing and validating a multidimensional nonprofit brand orientation scale," Journal of Business Research, Elsevier, vol. 58(6), pages 841-853, June.
    12. Raphael Amit & Christoph Zott, 2001. "Value creation in E‐business," Strategic Management Journal, Wiley Blackwell, vol. 22(6‐7), pages 493-520, June.
    13. Guillermo Antonio Dávila & Susanne Durst & Gregorio Varvakis, 2018. "KNOWLEDGE ABSORPTIVE CAPACITY, INNOVATION, AND FIRM’s PERFORMANCE: INSIGHTS FROM THE SOUTH OF BRAZIL," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(02), pages 1-34, February.
    14. Benn Lawson & Danny Samson, 2001. "Developing Innovation Capability In Organisations: A Dynamic Capabilities Approach," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 377-400.
    15. Fosfuri, Andrea & Tribø, Josep A., 2008. "Exploring the antecedents of potential absorptive capacity and its impact on innovation performance," Omega, Elsevier, vol. 36(2), pages 173-187, April.
    16. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    17. Wang, Hui-Ming Deanna & Sengupta, Sanjit, 2016. "Stakeholder relationships, brand equity, firm performance: A resource-based perspective," Journal of Business Research, Elsevier, vol. 69(12), pages 5561-5568.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alexandra Zamfirache & Titus Suciu & Carmen Elena Anton & Ruxandra-Gabriela Albu & Ioana-Simona Ivasciuc, 2023. "The Interest Shown by Potential Young Entrepreneurs in Romania Regarding Feasible Funding Sources, in the Context of a Sustainable Entrepreneurial Education," Sustainability, MDPI, vol. 15(6), pages 1-29, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schriber, Svante & Löwstedt, Jan, 2015. "Tangible resources and the development of organizational capabilities," Scandinavian Journal of Management, Elsevier, vol. 31(1), pages 54-68.
    2. Sang-Uk Jung & Valeriia Shegai, 2023. "The Impact of Digital Marketing Innovation on Firm Performance: Mediation by Marketing Capability and Moderation by Firm Size," Sustainability, MDPI, vol. 15(7), pages 1-16, March.
    3. Amit Kumar Gupta & Narain Gupta, 2019. "Innovation and Culture as a Dynamic Capability for Firm Performance: A Study from Emerging Markets," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 20(4), pages 323-336, December.
    4. Arie Y Lewin & Silvia Massini & Carine Peeters, 2020. "Absorptive capacity, socially enabling mechanisms, and the role of learning from trial and error experiments: A tribute to Dan Levinthal’s contribution to international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(9), pages 1568-1579, December.
    5. Mennens, Kars & van Gils, Anita & Odekerken - Schröder, Gaby & Letterie, Wilko, 2016. "Exploring Antecedents of Service Innovation Excellence in Manufacturing SMEs," Research Memorandum 025, Maastricht University, Graduate School of Business and Economics (GSBE).
    6. Marlenne G. Velazquez-Cazares & Anna M. Gil-Lafuente & Ernesto Leon-Castro & Fabio Blanco-Mesa, 2021. "Innovation capabilities measurement using fuzzy methodologies: a Colombian SMEs case," Computational and Mathematical Organization Theory, Springer, vol. 27(4), pages 384-413, December.
    7. Daspit, Joshua J. & Long, Rebecca G. & Pearson, Allison W., 2019. "How familiness affects innovation outcomes via absorptive capacity: A dynamic capability perspective of the family firm," Journal of Family Business Strategy, Elsevier, vol. 10(2), pages 133-143.
    8. Camisón, César & Forés, Beatriz, 2010. "Knowledge absorptive capacity: New insights for its conceptualization and measurement," Journal of Business Research, Elsevier, vol. 63(7), pages 707-715, July.
    9. Hammady Ahmed DINE RABEH, 2013. "Firm Resources’ Entanglement Determines ITS Absorptive Capacity: A Review Towards A New Reconceptualization," Working Papers 270, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation.
    10. Ritter-Hayashi, Daniela & Knoben, Joris & Vermeulen, Patrick A.M., 2021. "Temporary employment: Curse or blessing for a firm's absorptive capacity?," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    11. Rahman, Muhammad Sabbir & Bag, Surajit & Gupta, Shivam & Sivarajah, Uthayasankar, 2023. "Technology readiness of B2B firms and AI-based customer relationship management capability for enhancing social sustainability performance," Journal of Business Research, Elsevier, vol. 156(C).
    12. Neirotti, Paolo & Pesce, Danilo & Battaglia, Daniele, 2021. "Algorithms for operational decision-making: An absorptive capacity perspective on the process of converting data into relevant knowledge," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    13. Minerva Martínez Ávila, 2022. "Competitive Advantage and Knowledge Absorptive Capacity: the Mediating Role of Innovative Capability," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(1), pages 185-210, March.
    14. Eriksson, Taina, 2014. "Processes, antecedents and outcomes of dynamic capabilities," Scandinavian Journal of Management, Elsevier, vol. 30(1), pages 65-82.
    15. Chahal, Hardeep & Gupta, Mahesh & Bhan, Namrita & Cheng, T.C.E., 2020. "Operations management research grounded in the resource-based view: A meta-analysis," International Journal of Production Economics, Elsevier, vol. 230(C).
    16. Weidner, Nadia & Som, Oliver & Horvat, Djerdj, 2023. "An integrated conceptual framework for analysing heterogeneous configurations of absorptive capacity in manufacturing firms with the DUI innovation mode," Technovation, Elsevier, vol. 121(C).
    17. Radoslaw Nowak, 2019. "The Effects Of Cognitive Diversity And Cohesiveness On Absorptive Capacity," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 1-23, April.
    18. Montserrat Boronat-Navarro & Alexandra García-Joerger, 2019. "Ambidexterity, Alliances and Environmental Management System Adoption in Spanish Hotels," Sustainability, MDPI, vol. 11(20), pages 1-16, October.
    19. Zhang-Zhang, YingYing & Rohlfer, Sylvia & Varma, Arup, 2022. "Strategic people management in contemporary highly dynamic VUCA contexts: A knowledge worker perspective," Journal of Business Research, Elsevier, vol. 144(C), pages 587-598.
    20. Agata Sudolska & Justyna Łapińska, 2020. "Exploring Determinants of Innovation Capability in Manufacturing Companies Operating in Poland," Sustainability, MDPI, vol. 12(17), pages 1-21, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2022:i:11:p:6422-:d:822946. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.