The moderating effects of service solution characteristics on competitive advantage

The objective of this study is to improve the understanding of the moderating effects of service solution characteristics on competitive advantage of knowledge-intensive business services (KIBS). This study is among the first to systematically operationalize the contingents in the absorptive capacity construct as service solution characteristics, that is, intangibility, heterogeneity, inseparability, and perishability, and tested them in the KIBS sector. Using a sample of 327 new technology-based KIBS firms in Finland, a hierarchical multiple regression analysis is applied to test the hypothesized moderator effects. The results suggest that service solution characteristics moderate the effects of the antecedents on absorptive capacity and the effect of absorptive capacity on competitive advantage. Guidelines are provided to practitioners to deal with projects with different service solution characteristics.     

Open innovation: Are absorptive and desorptive capabilities complementary?

While recent studies in open innovation emphasize the synergies between in-bound and out-bound knowledge flow, empirical results are inconsistent. In this study, we argue that in order to engage simultaneously in both “buying” and “selling” activities, firms need to develop specific capabilities to manage knowledge inflows and outflows, e.g., absorptive and desorptive capacities. We build on key aspects of open innovation and knowledge management literature, arguing that absorptive and desorptive capacity are complementary rather than substitute, and engaging simultaneously in both activities should allow firms to develop their financial performance. We test our model using a sample of 541 New Zealand firms that are deeply involved in international collaborations and find empirical evidence that absorptive and desorptive capacity are not independent and the balanced development of these capabilities has higher impacts on firm’s performance. Further, our findings indicate that technology licensing capability is not a stand-alone task, and its interplay with absorptive capacity plays a key role in the development of a firm’s performance.     

Motivation and ability in the decision to acquire

This study considers the decision to undertake an acquisition using a framework built around the concepts of motivation and ability to acquire. The paper develops an integrative model to examine how firm characteristics contribute to motivation and ability in predicting the likelihood of an acquisition and draws on two streams of literature to motivate the model: behavioral theory of the firm to explain a firm's motivation to acquire, and absorptive capacity to explain a firm's ability to acquire. Results from a publicly traded sample show that firms failing to meet aspirations (i.e., those with motivation) are more likely to acquire, as are firms that have a high absorptive capacity (i.e., those with ability). Most interestingly, absorptive capacity moderates the influence of performance shortfalls in the decision to acquire and is most important when the motivation to acquire is low.     

Absorptive capacity,innovation and cultural barriers: A conditional mediation model

The construct of absorptive capacity has two dimensions: potential absorptive capacity (PACAP) and realized absorptive capacity (RACAP). This study addresses these two dimensions separately, and analyzes their influence on innovation outcomes (IO) in organizations. The study also examines the mediating role of RACAP in the relationship between PACAP and IO. Furthermore, the paper contains a discussion on the moderating role of cultural barriers (CB) in decreasing the PACAP–RACAP link. Consequently, this study builds and tests a conditional process model. Data comes from a sample of 110 firms from the Spanish automotive components manufacturing sector. Results from variance-based structural equation modeling and the PROCESS tool show that RACAP fully mediates the influence of PACAP on IO, and that CB negatively conditions this indirect effect. This study provides evidence that when CB attains medium-to-high values, this indirect influence is not different from zero.     

Understanding Absorptive Capacity from a Network Perspective

The term absorptive capacity refers to the notion that firms may have differing capabilities to innovate and to recognise the value of new knowledge, assimilate it, and apply it to creating business value. Developing such capabilities often requires firms to become part of a value network. We therefore apply the notion of absorptive capacity to the level of both the firm, and the wider value network in that it is embedded. The purpose of this research is to understand how absorptive capacity process may be moderated by contingent factors so that a more complete picture of absorptive capacity development emerges from our research. We identify from the literature on learning, innovation, and networks several theoretical perspectives that may help researchers to understand how contingent factors may facilitate and/or inhibit the development of absorptive capacity capabilities. We offer a set of propositions that may guide research into learning and innovation in business networks, and we discuss the managerial implications of these propositions.     

Understanding Firms’ Approaches to Voluntary Certification: Evidence from Multiple Case Studies in FSC Certification

Voluntary certifications, such as Forestry Stewardship Council (FSC) in the forestry sector, are used to manage sustainable and socially responsible practices in firms. Even though the certifications are based on standards, it has been reported that adopting firms are nothing but a homogeneous cohort of adopters and in fact differ in their approaches to the certification. In this paper, we conceptualize firms’ approach to certification and link the approaches to various aspects of certification. Using an inductive approach and deriving our data from multiple case studies from forestry FSC certification, we argue that firms’ approach to certification is explained by their development of absorptive capacity, alignment of their organizational routines and their engagement in negotiations with FSC. We also argue that these approaches affect firm’s benefits from certification, their level of adherence to the requirements of the certification and their likelihood to withdraw from the certification. We discuss our findings in view of the literature on absorptive capacity, institutional literature and the literature on collective action and also discuss the implications of the study to voluntary certification literature in general.     

Do innovative emerging market cross-border acquirers create more shareholder value? Evidence from India

This study attempts to investigate the role of absorptive capacity of emerging market firms in creating shareholder value from developed market acquisitions. It analyzes the cumulative abnormal return of cross border acquisitions of listed Indian firms in Europe focusing on acquirers’ research intensity. The study discovers a U-shaped relationship between research intensity of Indian acquirers and their cumulative abnormal return following acquisitions in Europe. As such, firms with no research capacity can benefit from the acquisition by accessing advanced targets, although firms with extensive research capacity outperform any of their Indian competitors as these firms have the absorptive capacity to not only exploit but also explore the knowledge base of the acquired target. Furthermore, we found a positive effect of the acquisition of a high-tech target company, regardless of the absorptive capacity of the acquirer. We also found that business group membership has a positive impact on shareholder value, although horizontal acquisitions as compared to vertical and unrelated deals have a significantly negative impact for these companies. This result is again linked to the more explorative nature of vertical and unrelated acquisitions in comparison with horizontal deals that are more based on the exploitation of existing resources and capabilities.     

Exploitative and exploratory innovations in emerging economies: The role of realized absorptive capacity and learning intent

This paper investigates the mediating effect of learning intent in transforming local suppliers’ potential absorptive capacity into realized absorptive capacity and its impact on exploitative and exploratory innovation. Using survey data from 155 auto parts manufacturers in Pakistan, we find that local firms’ realized absorptive capacity enables them to develop both exploitative and exploratory innovations. The findings further suggest that local suppliers’ learning intent mediates the relationship between potential and realized absorptive capacity which in turn lead to both types of innovation. In the context of the emerging economy of Pakistan, local suppliers’ absorptive capacity is found to be critically important in spurring exploitative and exploratory innovation, but learning intent enables realized absorptive capacity and thus in conjunction with realized absorptive capacity supports innovation. Consequently, there would be a strong case for policy intervention to assist emerging economy firms in building their absorptive capacity and strengthening their learning intent as a route for promoting innovation and improving their value added position in the global value chains of multinational enterprises.     

Absorptive Capacity and FDI Spillovers: Evidence from Quantile Regressions

Using Turkish firm-level data for the period 2003–2010, we look at the relationship between foreign direct investment, absorptive capacity, and spillovers at a disaggregated level, and analyze whether firms operating in different quantiles of the productivity distribution respond differently to foreign presence and changes in absorptive capacity. The results reveal that, for a given level of foreign presence, it pays to increase the absorptive capacity of firms operating in lower quantiles. When it comes to inter-industry spillovers, it is counterproductive to increase the absorptive capacity of firms already operating in higher quantiles, as this diverts resources from other productive activities.     

Measuring consumer-based brand authenticity

Postmodern consumers use brands to create an authentic self and to reconnect to place, time, culture and others. Although previous research has identified that consumers draw on a range of cues in order to attribute authenticity to branded objects, no scales exist to measure the construct of brand authenticity. Building on the existing literature, this paper uses quantitative methods to develop a psychometrically robust measure of brand authenticity from a consumer's perspective. Findings demonstrate convergent, discriminant and predictive validity, whereby 14 items represent three interrelated first order factors labeled quality commitment, sincerity and heritage that correspond with a higher order brand authenticity construct. This study extends our understanding of the consumption of authenticity. Moreover, it provides a tool by which firms can evaluate the effectiveness of strategic decisions designed to deliver an authentic brand offering to consumers. Limitations and directions for future research are discussed.     

Absorptive Capacity and Geographical Distance Two Mediating Factors of FDI Spillovers: a Threshold Regression Analysis for Spanish Firms

This paper investigates the effect of foreign direct investment on productivity growth in the manufacturing industries of Spain. A theoretical model that includes the effects of technological gaps and absorptive capacity, both presenting nonlinear relationships is proposed. A sample of 2722 Spanish manufacturing firms from 1993 to 2006 was used. Threshold regression made it possible to contrast the non-linear relationship between inward FDI and productivity improvement in domestic firms, which is conditioned by the absorptive capacity and geographical distance. Spanish domestic firms with high absorptive capacities benefit from positive spillovers and have sufficient capability to internalize the more complex knowledge provided by multinational firms. The rest of the firms are negatively affected by the presence of multinational firms.     

International technology spillovers and innovation: Evidence from Taiwanese high-tech firms

This paper uses Taiwanese high-tech firms’ data from 2003 to 2007 to investigate the impacts of international technology spillovers and firms’ R&D activities on firms’ innovation performance. We also consider absorptive capability and examine whether the technology spillovers have different effect on firms' innovation performance. We choose patent application counts to measure firms' innovation performance, and adopt panel Ordinary Least Squares (OLS) with fixed-effect and random-effect models as well as System Generalized Method of Moments (GMM) model to estimate. The empirical findings indicate the innovation performance of high-tech firms is positively affected by their R&D efforts, export performance, and the presences of multinational corporations. Furthermore, when absorptive capacity is taken into account, the technology spillovers by exporting and technology import would affect the innovation performance more.     

How absorptive capacity moderates the value of firm innovativeness in turbulent markets

Drawing on the complementarity perspective and contingent resource‐based theory, this study develops a moderated moderation framework to investigate how absorptive capacity moderates the value of firm innovativeness under market turbulence. The results of the survey data from 402 firms reveal that the efficacy of firm innovativeness is not universal but simultaneously contingent on absorptive capacity and market turbulence. Furthermore, absorptive capacity does not always enhance the value of firm innovativeness; the positive moderating effect of absorptive capacity manifests itself only when market turbulence is relatively high. These findings also highlight that change in customer needs is a key factor affecting the complementarity of relevant resources and capabilities. Thus, this study contributes to advances in theory and has new practical implications. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

The Influence of Partner Knowledge Complementarities on the Effectiveness of IT Outsourcing

Despite the importance of knowledge complementarities to inter-firm cooperation, few researchers in information systems (IS) have examined, to date, the construct of knowledge complementarities (KC), and none have examined its role in the success of IT outsourcing alliances. In this paper, we distinguish between potential knowledge complementarities (PKC) and synergistic value, which comprise KC. PKC is conceptualized as a multidimensional construct encompassing knowledge types (similar and specialized) and knowledge domains (business and IT). Further, we examine the extent to which PKC between the client and the vendor promotes success in IT outsourcing alliances. This research also includes relative absorptive capacity because it is relevant when complementary knowledge flows between organizations. We used data from a field study of 81 firms in Korea to test the proposed model. Our findings indicate that each dimension of PKC contributes uniquely to knowledge complementarities. The results also show that PKC is significantly associated with IT outsourcing effectiveness. Relative absorptive capacity is found to be a moderator between PKC and IT outsourcing effectiveness. The theoretical and practical implications of these findings are discussed in the paper.     

Family firm performance: The influence of entrepreneurial orientation and absorptive capacity

This article investigates the influence of entrepreneurial orientation and absorptive capacity on family firm performance. Partial least squares structural equation modeling (PLS‐SEM) was used to analyze empirical data for 218 Spanish family firms. Absorptive capacity positively mediated the relationship between entrepreneurial orientation and family firm performance. This total mediation effect suppressed the direct effect of entrepreneurial orientation on family firm performance. A major implication of this finding is that for family firms to improve their performance through entrepreneurial orientation, absorptive capacity must act as a mediator.     

International entrepreneurial capability: The measurement and a comparison between born global firms and traditional exporters in China

This study presents the development and application of a new measure of international entrepreneurial capability. The data were collected from manufacturing firms in China, both traditional exporters and born global firms. Five key dimensions of international entrepreneurial capability were identified from the capability and entrepreneurship literature. After scale purification and validation, this new measure was used to examine the relationship between international entrepreneurial capability and global market performance. Born global firms are statistically different from traditional firms along three dimensions: international learning capability, international networking capability, and international experience. Implications and future research directions are then provided.     

The Role of Absorptive Capacity in Acquisition Knowledge Transfer

This article examines the role of absorptive capacity in acquisitions. We propose that absorptive capacity is an important determinant of acquisition knowledge transfer. Also, we identify antecedents of absorptive capacity in the specific context of acquisitions. These include contextual (national cultural differences), individual (employee withdrawal), and organizational design level (integration process communication, knowledge processing system) antecedents. We test our hypotheses on a sample of domestic and foreign acquisitions conducted by Finnish companies. This study contributes to the acquisition literature by elaborating on the role of absorptive capacity in acquisitions and to the general absorptive capacity literature by highlighting the importance of previously underexplored antecedents and outcomes of absorptive capacity. © 2013 Wiley Periodicals, Inc.     

Learning by exporting under fast,short-term changes: The moderating role of absorptive capacity and foreign collaborative agreements

What are the consequences for innovation of fast, short-term changes in exporting activity? Building on the learning by exporting literature and using a sample of 880 Italian manufacturing firms over two successive time periods, our study reveals key asymmetries. First, a rapid increase in export breadth, but not in export depth, reduces the firm’s probability of developing new innovative outputs. Second, no such effects are found in the case of a decrease in firms’ exporting activity. Third, both absorptive capacity and foreign collaborative agreements facilitate the absorption of the shock occurring when firms experience a rapid increase in export breadth, but not when the rapid increase takes place in export depth. Theoretical and managerial implications emerge from this research.     

In Search of Environmental Spillovers

There is an extensive literature that examines the relationship between foreign direct investment (FDI) and the productivity and competitiveness of domestic firms. Using estimation techniques from the productivity spillover literature, this paper tests for the presence of environmental spillovers from foreign firms. On the basis that foreign‐owned firms may encourage firms in their extended supply chain to improve their environment‐related management practices, evidence for the existence of environmental spillovers should be easier to find than productivity spillovers where firms naturally attempt to minimise intra‐industry knowledge leakage. In this paper we show that, first, foreign‐owned firms are more likely to implement environmental management systems (EMS) and, second, that the presence of foreign‐owned firms in those sectors that a firm supplies can encourage good environmental practice. This is especially true if a firm is foreign, has high absorptive capacity, and operates in the presence of formal and informal networks.     

Technological variables and absorptive capacity's influence on performance through corporate entrepreneurship

Technology and corporate entrepreneurship constitute an important source of competitive advantage for organizations, as they enable the development and exploitation of new opportunities. This study proposes a model to analyze the effects of top management support for technology on the promotion of technological skills, absorptive capacity, and technological distinctive competencies. The research also considers the impact of technological skills and absorptive capacity on the development of technological distinctive competencies, analyzing the influence of these variables on organizational performance through corporate entrepreneurship. The study tests these relationships empirically using 160 European technology firms. The paper ends with discussion of the findings and provides several theoretical and practical implications for future research.