Consulting knowledge and organisation's absorptive capacity: A communication chain perspective

This study investigates the communication chain of consulting knowledge constituted by consultants and internal lecturers. We analyse the differences between consultants and internal lecturers in their capability of knowledge training and discuss its influence on organisations' absorption of consulting knowledge. Based on a Mann–Whitney U test of data from 47 quality management consultants and 235 internal lecturers in Taiwan, we found that internal lecturers significantly exhibited weaker capability than consultants, especially in knowledge structure, knowledge transformation, trainee orientation and training ethics. The capability gap was disadvantageous for organisations to absorb consulting knowledge and suggestions for improving this problem were provided finally.     

Strategic pathways to product innovation capabilities in SMEs

The study articulates a two-dimensional typology of dynamic capabilities, grouping them by the life-cycle stage and the timing of expected returns. Using a cross-industry sample of manufacturing SMEs, we validate and map four distinct innovation strategies onto specific sets of product innovation capabilities. Results show that human capital development efforts catalyze both the external absorption and the internal emergence of novel capabilities. Stronger emphasis on product features and broader market access stimulate the effective replication of extant capabilities, yielding immediate payoffs. Process-focused strategies are a double-edged sword: they facilitate the acquisition and incorporation of external insights yet bound internal capability development.     

An absorptive capacity theory of knowledge spillover entrepreneurship

The knowledge spillover theory of entrepreneurship identifies new knowledge as a source of entrepreneurial opportunities, and suggests that entrepreneurs play an important role in commercializing new knowledge developed in large incumbent firms or research institutions. This paper argues that, knowledge spillover entrepreneurship depends not only on new knowledge but more importantly on entrepreneurial absorptive capacity that allows entrepreneurs to understand new knowledge, recognize its value, and commercialize it by creating a firm. This absorptive capacity theory of knowledge spillover entrepreneurship is tested using data based on U.S. metropolitan areas.     

Knowledge quality,innovation and firm performance: a study of knowledge transfer in SMEs

Small Business Economics - Using structural equation modelling on 291 small and medium enterprises in Australia, we examine the impact of knowledge transfers from supply chain actors on innovation...     

The effect of experience and absorptive capacity on foreign market knowledge

Learning about foreign markets often occurs through collaboration with other firms who have this knowledge. In this paper, we focus on one aspect of foreign market knowledge, which is the knowledge a partner in a dyadic relationship, has of the other partner and of their respective business network relationships. The concept ‘absorptive capacity’ [Admin. Sci. Q. 35 (1990) 128] is used to describe the firm’s ability to use its prior related knowledge and diverse background to identify the value of new information and to develop this into something creative. We develop and empirically test a model of how depth and diversity of experience affect absorptive capacity, and how this absorptive capacity affects the way a lack of foreign market knowledge is perceived as an obstacle in carrying out the ongoing business activity.The results show that the lack of foreign market knowledge in the ongoing business is determined both by the firm’s absorptive capacity generated in dyadic relationships with foreign customers and the customer’s network. The dyadic and network absorptive capacities, however, appear to be used differently in the ongoing business. Dyadic absorptive capacity seems to decrease the lack of foreign market knowledge, whereas customer network absorptive capacity seems to increase it.     

The effects of absorptive capacity,knowledge sourcing strategy,and alliance forms on firm performance

This paper explores the relationship between absorptive capacity, knowledge sourcing strategy, alliance forms, and firm performance. Based on the literature, the concept of a knowledge sourcing strategy in alliance contexts is proposed, which can be categorised into two types: a knowledge internalisation strategy and a knowledge access strategy. From an organisational learning perspective, it is argued that a firm's absorptive capacity has a positive influence on a knowledge internalisation strategy, and accordingly a firm's choices of alliance forms are also influenced. R&D performance is also included in the theoretical model in order to generate further managerial implications. Instead of using conventional regression methods, structural equation modelling (SEM) is adopted to conduct path analysis, as SEM is well suited in verifying multiple-dependent models. The arguments advanced are supported by empirical analysis of a sample of 148 alliances.     

R&D,firm growth and the role of innovation persistence: an analysis of Finnish SMEs and large firms

R&D investment and growth in SMEs and large firms relate in a complex way. This paper analyses what role persistence of innovation output plays in shaping that relationship. We apply a vector auto-regression model to Finnish firm-level data and summarize the lead–lag relationship and complex co-movements of R&D growth and firm growth series. We found only continuous product and process innovators to have positive associations between R&D growth and sales growth. Also the associations between sales growth and subsequent R&D growth were stronger for continuous innovators than for occasional innovators, but only for product innovators. In the case of process innovators it is the occasional innovators that exhibit a stronger association between sales growth and subsequent R&D growth. In addition, our results vary between large and small firms. We express the need for further research on innovation dynamics and growth of SMEs analysing the interactions between different innovation activities.     

Corporate culture and absorptive capacity: The moderating role of national culture dimensions on innovation management

Firms have to strive for innovation constantly in order to gain and retain a competitive advantage, which renders absorptive capacity (ACAP) – a firm’s ability to absorb and apply external knowledge – highly relevant. Based on data obtained from 592 CEOs and managers of firms in Austria, Brazil, Germany, India, Singapore, and the United States, we show how ACAP can be fostered in an international context. We analyze how corporate culture affects potential as well as realized ACAP and how national culture dimensions moderate these relationships in a fit-as-moderation model. We reveal that the adhocracy culture supports potential and realized ACAP, whereas the market and hierarchy cultures hinder both potential and realized ACAP. Moreover, the relationship between corporate culture and potential ACAP is stable across national culture dimensions, whereas selected national and corporate cultures are more effective in fostering realized ACAP. These results open up opportunities for researchers and support firms in their attempts to foster their firms’ knowledge management processes.     

Fostering integration through HRM practices: An empirical examination of absorptive capacity and knowledge transfer in cross-border M&As

Transfer of knowledge-based resources from acquirers to the acquired units has been ubiquitously emphasized as an important driver of post-acquisition integration. Equally emphasized is the importance of recipient unit’s absorptive capacity for the success of knowledge transfer and the facilitating role of HRM practices in developing absorptive capacity. In this paper, we integrate different streams of research on post-acquisition integration, knowledge transfer, absorptive capacity and HRM practices. Different from most past research, we pay attention theoretically and empirically to the multi-dimensional nature of both knowledge transfer and absorptive capacity. We test our hypotheses on a sample of acquired Chinese subsidiaries of 181 multinational corporations from seven countries. We find that successful inflow and implementation of knowledge require the acquired unit to have distinct types of capabilities each of which can be developed by a specific HRM practice. These results contribute literature by recognizing absorptive capacity as a manageable capability and identifying how different components of this capability could be developed by specific HRM practices. Furthermore, our results shed light on human side of M&As by examining how companies can foster post-acquisition integration by fine-tuning the absorptive capacity of acquired units.     

The concept of absorptive capacity: Origins,content and practical relevance

Ever since the end of the Second World War there have been regular calls for a comprehensive and extensive “Marshall Plan” for Third World countries. One of the most popular lines of counter-argument is that developing countries do not even possess the necessary absorptive capacity to make effective use of larger international transfers of purchasing power. On the strength of this “Low Absorptive Capacity Thesis”, as S.P. Schatz called it in 1961¹, a politically unpleasant prlblem, yet one which represents a question of principle in development policy, has for years been dismissed or passed on to the fundamental planning departments of development aid institutions and to the representatives of science and research. What exactly lies behind this problem?     

Threshold effects,technology purchasing,and firm outcomes: An absorptive capacity perspective

External technology purchasing is frequently adopted as a strategy to facilitate technology innovation and to enhance firm performance. However, research shows that there is considerable heterogeneity across firms with respect to innovation output and firm performance after technology purchasing. This study uses an absorptive capacity perspective in proposing the existence of an R&D employees threshold and a technology purchasing scale threshold. Using a sample of 1460 high-tech companies in China, we find support for both thresholds. We also find that the two variables are complementary with each other, jointly promoting innovation when both thresholds are crossed.     

Foreign direct investment,technological advancement,and absorptive capacity: A network analysis

Technological advancement is an important instrument for economic and technological development, but most countries receive the benefits of innovation and new technologies through technology transfer. Previous studies typically consider direct linkages in order to understand technological advancement without paying much attention to indirect linkages, such as the inter-connectivity of the recipients of Foreign Direct Investment (FDI). To understand the relationship between FDI and technological advancement and whether recipients’ absorptive capacity matters, we model global FDI networks for the period 2009–2016. We find empirical evidence that the global FDI network has a core-periphery structure, and that core countries are more technologically developed than peripheral countries. We also find empirical evidence that a country’s centrality of position in the global FDI network is positively associated with the technological advancement of a country, and that the absorptive capacity of a country can moderate this relationship. Regression analyses using instrumental variable estimators confirm the robustness of our findings. The most striking finding of our research is the strong moderation effect of knowledge intensity, a constituent of absorptive capacity. This finding provides a nuanced understanding of absorptive capacity, demonstrating the ways a country can benefit from FDI by reshaping the factors related to absorptive capacity.     

Strategic human resource practices and innovation performance — The mediating role of knowledge management capacity

This study examines the role of knowledge management capacity in the relationship between strategic human resource practices and innovation performance from the knowledge-based view. This study uses regression analysis to test the hypotheses in a sample of 146 firms. The results indicate that strategic human resource practices are positively related to knowledge management capacity which, in turn, has a positive effect on innovation performance. The findings provide evidence that knowledge management capacity plays a mediating role between strategic human resource practices and innovation performance. Finally, this study discusses managerial implications and highlights future research directions.     

Family involvement,environmental turbulence,and R&D investment: evidence from Listed Chinese SMEs

Small Business Economics - This study draws on the insights of institutional theory and the environmental contingency perspective to explore family firm leaders’ approaches toward R&D...     

Organizational innovation outcomes in SMEs: Effects of age,size, and sector

Innovation studies concentrate on factors contributing to innovation. However, governments seek clearer understanding of innovation outcomes in their appraisal of the costs and benefits of policies to promote innovation in small and medium-sized enterprises (SMEs). This study examines organizational innovation (OI) outcomes in SMEs. Based on company interviews and a mail survey, the findings reveal OI results in enhanced productivity, margin, market leadership, and working environments. However, OI does not lead to operational efficiency and employees’ retention. Organizational innovation leads to companies operating outside their core competency but does not have an adverse environmental impact. Organizational innovation has greater impact on small firms. The paper includes practical and theoretical implications.     

Local and international knowledge search and product innovation: The moderating role of technology boundary spanning

Drawing on the external knowledge search literature and the literature on international diversification, this study examined the interactive effect of local and international search for new knowledge on product innovation and the moderating role of a firm's technology boundary spanning activities. Specifically, it proposed that extensive local and international search interact to positively predict product innovation success and this relationship is weaker for firms entering a new technology domain. The results using data on 343 Chinese manufacturing firms across 5 industries indicated the support for the predictions.     

R&D policies, trade and process innovation

We set up a simple trade model with two countries hosting one firm each. The firms invest in cost-reducing R&D, and each government may grant R&D subsidies to the domestic firm. We show that it is optimal for a government to provide higher R&D subsidies the lower the level of trade costs, even if the firms are independent monopolies. If firms produce imperfect substitutes, policy competition may become so fierce that only one of the firms survives. International policy harmonization eliminates policy competition and ensures a symmetric outcome. However, it is shown that harmonization is not necessarily welfare maximizing. The optimal coordinated policies may imply an asymmetric outcome with R&D subsidies to only one of the firms.     

Parkinson’s Law and absorptive capacity

Parkinson’s Law, or the principle that work expands to fill the time available for its completion and that the number of subordinates multiply at a fixed rate regardless of the amount of work produced was postulated by Professor Parkinson as a satire as well as a serious social comment on the development and growth of bureaucracy. Over the years it has come to be used as a shorthand expression for the inefficiency and mindless expansion of officialdom.¹ Absorptive capacity, on the other hand, is defined as the amount of capital which a country can utilise productively in the short run. This article analyses the relationship of these two concepts in the context of development aid.     

Absorptive capacity, innovation, and financial performance

This study here examines the role of absorptive capacity as both a mechanism to identify and translate external knowledge inflows into tangible benefits, as well as a means of achieving superior innovation and time-lagged financial performance. Using path analysis in a sample of 461 Greek enterprises participating in the third Community Innovation Survey, this study demonstrates that external knowledge inflows are directly related to absorptive capacity and indirectly related to innovation. Absorptive capacity contributes, directly and indirectly, to innovation and financial performance but in different time spans. This study, therefore, contributes to the understanding of absorptive capacity's antecedents and outcomes by providing empirical evidence of longitudinal form that offers important research and practical implications.