In recent years, new types of innovation have emerged in emerging markets. Among them, the concept of frugal innovation has attracted the attention of academics and professionals for its value proposition. Frugal innovation has been considered a new source of innovation, but few scholarly papers discuss the subject in a robust way. This research aims to ascertain the association between certain organizational capabilities that help in the development of the frugal innovation. Prior to this association, it was necessary to demonstrate how the concept of frugal innovation can be measured. In this study, frugal innovation is an endogenous construct of the second order, which manifests the new with fewer resources, reflexively measured by: innovation in cost, sustainable innovation, open innovation and product innovation. Organizational capabilities are the exogenous constructs defined in terms of: production capability, technological capability, human capital capability and marketing capability. Some of these capabilities were considered to be first and second order. In order to verify the relationship between the defined constructs, the methodological procedures adopted in this research can be classified as formal, descriptive and associative, positivistic and quantitative in nature. For the data collection, the survey method adopted was the survey classified as intersectional. The data were collected is composed of 257 brazilian companies of different sectors and sizes. The process of sample analysis and consistency of data collected consisted of the use of statistical techniques of univariate and multivariate analysis. The use of Structural Equation Analysis using the Partial Least Square (PLS) method was more adequate for estimation of model parameters. The results have shown that frugal innovation is a strategy that combines cost efficiency and innovation. Frugal innovation can contribute to a better management of non-renewable environmental resources when oriented towards sustainability. The analysis of the results, showed that of the eight hypotheses raised, only two hypotheses were not supported. Human capital and first-order marketing capabilities were not associated with the formation of frugal innovation. The other capabilities used in the research were shown to be associated to the proposed model.