Sources of knowledge for innovation capability in subsistence small businesses: a case of the wood sector in Argentina

Abstract

In developing countries, the business environment is more uncertain, so normally, companies must continually seek new ways to compete, based on their innovation capability. This is especially necessary in small businesses that are created as a way of subsistence of the entrepreneur and their family (subsistence small businesses). The innovation of subsistence small businesses is very important in poorer areas of developing countries. Usually, the innovation systems condition the innovation of the companies, but the small size and the peripheral region can condition this effect. The research analyzes the effect of the different typology of sources of knowledge to increase the innovation capability in these businesses, combining regression with partial least squares. The research shows that external and internal sources of knowledge are important to increase innovation capability, and informal sources of knowledge are more important that formal sources, suggesting political actions to improve this process.