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Firm heterogeneity and innovation diffusion performance: absorptive capacities

Hongying Wang (Business School, Nanjing University of Information Science and Technology, Nanjing, China)
Bing Sun (School of Management and Economics, Harbin Engineering University, Harbin, China)

Management Decision

ISSN: 0025-1747

Article publication date: 27 August 2019

Issue publication date: 17 March 2020




The purpose of this paper is to undertake research on the relationship of firm heterogeneity and innovation diffusion performance, and the role of absorptive capacity in this relationship.


Based on the diffusion of innovation theory, enterprise heterogeneity directly affects the evaluation stage (considering whether to adopt it) and the experimental stage (observing whether it is suitable for one’s own situation) of the diffusion process. Therefore, the paper uses a structural equation model to construct the influencing factors model of enterprise heterogeneity on technology diffusion. Furthermore, questionnaires were distributed to 236 enterprises with different scales, nature and location to explore the impact of heterogeneity on technology diffusion with scientific, objective and comprehensive data.


Firm heterogeneity has a positive effect on absorptive capacity and absorptive capacity has a positive effect on technological innovation diffusion performance. Thus, absorptive capacity plays an intermediary role in the effect on enterprise heterogeneity and technological innovation diffusion performance. More interestingly, the authors get some results that are not entirely consistent with the theoretical assumptions.

Practical implications

Firm heterogeneity plays a central role in the process of innovation diffusion. Enterprises should build internal management platforms to enhance cooperation among employees, and establish links with other enterprises for opportunities for win-win cooperation. In addition, enterprises should control the frequency of internal activities, which will undermine the enthusiasm of enterprise members to participate in technology sharing.


This paper explores the interaction between technology potential, cooperation frequency and absorptive capacity from the perspective of systems theory. The findings enrich the theory of innovation diffusion, and explore the inherent reasons why enterprise heterogeneity affects innovation diffusion. Furthermore, the theory that intra-firm cooperation promotes innovation diffusion is not always correct.



The research was funded by the National Nature Science Foundation of China (71774035 and 71372020).


Wang, H. and Sun, B. (2020), "Firm heterogeneity and innovation diffusion performance: absorptive capacities", Management Decision, Vol. 58 No. 4, pp. 725-742.



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