Geography, Linkages and Capabilities: Innovation in the Agricultural Coffee Production in Latin America

The main contribution of this work is the proposal of a conceptual framework that integrates internal (to the firm) conditions with external influences at two geographical proximity levels, local and non-local, with respect to four types of innovation performance: product innovation, process innovation, managerial/organisational innovation and marketing innovation. This is quantitatively evaluated in a sample of 186 coffee farmers from Latin America. Following the Resource-Based View of the Firm (RBV), the internal conditions include two firm capabilities: technological capabilities and marketing capabilities. The external influences incorporates the evaluation of horizontal and vertical linkages with purposes of innovation at the local level (cluster geographical context) and non-local level (extra-cluster geographical context). The tests are controlled by the variable country of origin, which is not much relevant in these evaluations, as well as the variable for size, which is mostly significant although with a negative impact. The results suggest that internal conditions seem to be the most relevant factors related to innovation performance in this sample, whilst extra-cluster linkages are the external conditions with the highest relative importance in the explored models. This last outcome suggests the predominance of global value chains and its dynamics in relation to the innovative results of companies located in primary industries from developing countries. This seem to be the case even in the case of highly clustered activities within a region, such as the agricultural coffee production in Latin America.