Clarifying relationships between networking, absorptive capacity and financial performance among South Brazilian farmers

Abstract Financial performance is a key factor in promoting agribusiness development. Studying ways to increase these returns in the agricultural context provides a favorable environment to create solutions to attend the increasing global food consumption. The agribusiness industry has the potential to change this scenario, if farmers are financially sustainable to satisfy the demands with agricultural productivity. Would Networking between farmers and their stakeholders help increase their knowledge in order to innovate? Moreover, would their capability of applying new knowledge lead to higher financial returns? This research seeks to investigate if Networking among 222 farmers in South Brazil influences their Absorptive Capacity that leads to better Financial Performance. Using structural equation modeling, the findings show that Networking has a positive relationship with Potential Absorptive Capacity that influences Realized Absorptive Capacity and leads to higher Financial Performance. The findings and their implications were discussed followed by limitations and recommendations for future research.