**2. Literature Review and Formulation of Hypotheses**

#### *2.1. Innovation Capabilities*

There is a variety of perspectives regarding innovation capabilities (Olsson et al. 2010), with multifaceted and inconsistent constructs (Lawson and Samson 2001; Guan and Ma 2003; Oura et al. 2016; Perdomo-Ortiz et al. 2006; Ribau et al. 2017a) based on the context and the characteristics of the companies, with implications for the methodologies used, as it is necessary to adapt the scales to the methodology (Yi et al. 2013; Vicente et al. 2015; Ahmad and Lee 2016). From this perspective, a diversity of concepts about innovation capabilities was also found (see Table 1). For example, Lawson and Samson (2001) define ICs as the ability to continuously transform knowledge and innovative ideas into new products, production processes, and systems for the benefit of the firm and stakeholders. In the view of Guan and Ma (2003), ICs are firms' assets related to internal and acquired experiences. Akman and Yilmaz (2008) define innovation capabilities as organizational culture, promotional activities, and abilities to perceive and cope appropriately with the external environment. Hogan et al. (2011) and Saunila (2016) build on Lawson and Samson's (2001) concept of mainstream and newstream capabilities. However, we will consider the scales presented by Guan and Ma (2003) and use a scale suitable for Mozambican small and SMEs, which has been previously tested in China, Brazil, and Portugal (Guan and Ma 2003; Oura et al. 2016; Ribau et al. 2017a).

**Table 1.** Definitions and dimensions of innovation capability.

