Identifying unobserved heterogeneity in agribusiness firms’ innovation dynamic capabilities

Innovation dynamic capabilities (IDCs) are crucial for firms in competitive markets, yet their heterogeneous development and utilization remain underexplored. This study uses finite mixture partial least squares (FIMIX-PLS) to uncover unobserved heterogeneity in IDC configurations and their impact on market orientation (MO) in the Spanish agri-food sector. Three firm segments were identified, with IDCs positively influencing marketing capabilities and MO across all segments. However, relational capabilities significantly impacted MO only in segments K2 and K3. These findings challenge one-size-fits-all innovation strategies, urging managers to tailor approaches based on segment-specific resource configurations. This study advances IDC research and highlights the strategic importance of segment-focused innovation.