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The aim of this paper is to disentangle the interplay between nurturing interaction with external agents, innovation networks, and innovation capability. In particular, the paper argues that nurturing interaction with external agents (by means of participation in different events that allow face-to-face interaction, or via collaborative technology) positively affects the innovation capability of firms by allowing the development of innovation networks and making them run smoothly.

For this to be tested, an analysis has been carried out in Uruguayan software firms. A questionnaire was designed and addressed to the managers of the firms making up the target population. Structural equation modeling (SEM) based on partial least squares (PLS) was then applied to test the hypotheses put forward by the research.

The results obtained show that nurturing interaction with external agents has a positive and significant influence both on the formation of innovation networks and on their operational performance. This influence is much stronger when it comes to ensuring the smooth operation of the network than when it comes to facilitating its formation. Moreover, innovation networks and their functioning clearly mediate the relationship between interaction with external agents and innovation capability.

Traditional limitations of cross-sectional studies apply.

Although previous literature highlights the relevance of social interaction for the creation of new knowledge and subsequent innovation, the role of mediating variables has been hardly considered. This research helps to shed some light on this issue in the case of social interaction with external agents. In particular, the mediating role of innovation networks has been analyzed.

Innovation is considered an important stage in the process of competitiveness of companies. While there is an extensive literature in the management and innovation field that shows the characteristics that enhance a firm's ability to innovate, there is still no consensus on its determinants and nature. This study aims to advance the understanding of innovation capability (IC) by conducting a systematic review of relevant literature at the firm level.

The study reviews the literature by applying the categorization and contextualization of qualitative strategies. The study gathered 137 peer-reviewed papers from Scopus and Web of Science databases.

The papers were analysed and synthesized into an integrated framework that links IC with its internal and external determinants, and its consequences. In doing this, this study proposes directions for future investigations that might enlighten a better understanding of IC.

The study provides elements that can be useful during the design and implementation of innovative initiatives in a firm.

The paper jointly examines in the same model the nature, antecedents and consequences of IC. In the same vein, the framework provides the little-researched links between those themes in the IC literature.