Small businesses created as a way of subsisting are very important in Latin America in alleviating extreme poverty. These businesses possibly need to innovate to compete. Innovativeness is strongly linked with intellectual capital, but the limitations of subsistence small businesses weaken this link. In particular, human capital possibly affects innovativeness, but the effect can be mediated or moderated by other components of intellectual capital. This paper uses partial least squares to study the impact of the different dimensions of intellectual capital on innovativeness as a dynamic capability in small businesses in the timber industry in an area of Latin America, and, in particular, the mediation effect among them. The results show that human capital generates relational capital. The relational capital needs structural capital to improve the innovativeness of subsistence small businesses.
This study uses a combination of multinational enterprises and dynamic capabilities perspectives to illustrate how the involvement of foreign investors is able to contribute to a company’s corporate performance. Using Russian companies as an empirical sample and applying PLS-SEM, we test hypotheses regarding the impact of dynamic capabilities in terms of absorptive, adaptive and communicative capabilities, on the relationship between foreign ownership and performance. Findings indicate that dynamic capabilities fully mediate the process of foreign direct investments transformation into firm’s results. Our findings contribute to the understanding of the mechanism by which dynamic capabilities enhance the positive effects of foreign direct investments on business performance, and advance the theoretical understanding of how a dynamic capabilities concept could be incorporated into multinational enterprises theory in the framework of relationships between companies from economies with different knowledge endowment.