Linking absorptive capacity with innovation performance of artisan entrepreneurs: examining mediating role of strategic orientation

Abstract

Purpose

This research aims to investigate how absorptive capacity impacts artisan businesses' innovation performance in Jammu and Kashmir, India. Additionally, the study examines the role of strategic orientation (customer and technological orientation) as a mediator.

Design/methodology/approach

The study analysed data from 408 artisan entrepreneurs using partial least squares structural equation modelling. The research model was built on the “Dynamic-Capability Theory” of absorptive capacity and the “Resource-Based Theory” of performance.

Findings

The study’s findings suggest that both realised and potential absorptive capacity positively and significantly impact innovation performance. Moreover, customer and technology orientations positively and strongly influence innovation performance. Additionally, potential and realised absorptive capacity has a favourable impact on customer and technology orientation. The mediation analysis results indicate that customer and technological orientation have complementary partial mediation between potential absorptive capacity and innovation performance. Finally, mediating variables like customer and technological orientation show complementary partial mediation for realised absorptive capacity.

Originality/value

The research model would enrich the existing literature and offer an improved understanding of how absorptive capacity enhances the innovation performance among artisan entrepreneurs and concurrently validates the theory of “Dynamic-Capability Theory” of absorptive capacity and the “Resource Based Theory” of innovation performance of a firm.

Citation

Nika, A.S., Singh, R. and Bashir, N.U. (2024), "Linking absorptive capacity with innovation performance of artisan entrepreneurs: examining mediating role of strategic orientation", Benchmarking: An International Journal, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/BIJ-12-2023-0886