Conceptual framework highlights the role of strategic financial capability in enhancing innovation for agribusiness SMEs, suggesting policy implications.
Agribusiness SMEs in developing regions face persistent challenges related to financial limitations, market volatility, and low managerial capability. Although innovation is essential for competitiveness, it often fails to generate long-term benefits without strong financial support systems. This conceptual paper proposes a framework that positions Strategic Financial Capability (SFC) as a finance-based dynamic capability that converts innovation into Sustainable Competitive Advantage (SCA). The model integrates the Resource-Based View, Dynamic Capabilities Theory, and Strategic Financial Management. A systematic review of recent Scopus- indexed studies (2020–2025) was conducted to synthesize the roles of innovation, Entrepreneurial Orientation (EO), and Digital Transformation Capability (DTC). The findings indicate that SFC enables SMEs to align financial planning, investment, and risk management with innovation needs. EO and DTC further strengthen the innovation–SFC linkage by enhancing opportunity- seeking, digital efficiency, and informed decision-making. The study contributes by introducing SFC as a new theoretical construct and offering implications for SME development and regional policy.
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Hariman et al. (2026) studied this question.
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