This paper analyzes the relationship between the market orientation and the entrepreneurial orientation in regards to the business performance of rural enterprises, considering the mediation of incremental innovation process and the moderation of the amount of employees with university level, as well as the collaboration needed between the university and the enterprise in terms of organizational capabilities. A survey using Likert scales was employed, composing items of latent variables of a reflective-formative structural model. The sample of 208 Brazilian rural enterprises was processed using the structural equation models by the partial least squares method in predicting the results. The verification of empirical data provides evidence to confirm the theoretical model and hypotheses. The strong use of organizational capabilities leads to an improved business performance. Incremental innovation has no mediating effect on organizational capabilities and business performance. The university staff does not moderate the organizational capabilities to improve business performance. The collaborative relationship between the university and the enterprise moderates the relationship between entrepreneurial orientation and business performance. The limitation of the study is the restriction of the sample and that the results should not be generalized to other regions; however, they present significant practical implications of the importance of relationships between the university and the enterprise.
Key word: Entrepreneurial orientation, market orientation, incremental innovation, business performance, partial least squares.
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