Innovation in Food Processing Supply Chains: The Role of Social, and Cognitive Capital Development

Abstract

In supply chains, social attributes, such as trust, and commitment, are key drivers of efficiency performance. In the agriculture industry in developing countries like Vietnam, social capital may have a greater role when other formal systems are not in place. This study empirically tests the mediating role of supply chain absorptive capability as a complementary asset to leverage social, and cognitive capital to enhance innovation performance. This research examined small food producers using a standard questionnaire and captured 85 responses in Vietnam. The findings showed that social capital plays a more significant role in enhancing absorptive capability, highlighting the need for a structural resource network in developing regions. Food processing firms benefit from the direct and indirect influence of absorptive capability. Absorptive capability acts as a catalyst in enhancing cognitive, and social capital for improving innovation outcomes, such as new product development. The food producers should not just stop at sharing and capturing information, but move forward to deploy new ideas and learned knowledge. The results urge agricultural businesses to establish networks with supply chain partners, who can significantly impact the development of new ideas, and quickly exploit new knowledge to accommodate resources for sustainable agricultural strategies.