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Absorptive capacity and small family firm performance: exploring the mediation processes

Sanjay Chaudhary (Department of Strategy Management, Indian Institute of Management Kashipur, Kashipur, India)
Safal Batra (Department of Strategy Management, Indian Institute of Management, Kashipur, India)

Journal of Knowledge Management

ISSN: 1367-3270

Article publication date: 15 May 2018

Issue publication date: 10 July 2018

1496

Abstract

Purpose

Despite the recognized importance of knowledge management for small family firms, relatively little empirical research has been done so far to understand the mechanisms through which absorptive capacity (AC) assists their performance. The purpose of this study is to understand the relationship between absorptive capacity and performance in small family firms.

Design/methodology/approach

In this study, the authors theoretically argue and empirically validate that AC enables the creation of entrepreneurial, market and technology orientations in small family firms, which, in turn, lead to superior firm performance. They also tested the study’s hypotheses using mediation and multiple linear regression analyses on data collected from 272 small Indian family firms.

Findings

The study’s findings suggest indirect relationship between AC and performance. The strategic orientations provide a mechanism through which investments in small family firms’ AC results in firm performance.

Practical implications

This study offers crucial insights to practitioners and small firm managers regarding the use of knowledge-based capabilities in creating appropriate strategic postures, which, in turn, assist firm performance.

Originality/value

This study is among few research attempts in understanding the knowledge aspects of small family firms. The present research contributes to the existing literature by unravelling the relationship between knowledge management and small family firm performance. Also, by bringing in data from an under-studied context of an emerging economy, this study strengthens the theoretical applicability of knowledge management in different contexts.

Keywords

Citation

Chaudhary, S. and Batra, S. (2018), "Absorptive capacity and small family firm performance: exploring the mediation processes", Journal of Knowledge Management, Vol. 22 No. 6, pp. 1201-1216. https://doi.org/10.1108/JKM-01-2017-0047

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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