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Understanding the role of organizational intellectual capital on developing absorptive capacity to strategize innovation ambidexterity

Sehrish Huma (Faculty of Karachi University Business School, University of Karachi, Karachi, Pakistan)
Sidra Muslim (Faculty of Business Administration, IQRA University, Karachi, Pakistan)
Waqar Ahmed (Faculty of Business Administration, IQRA University, Karachi, Pakistan)

Review of International Business and Strategy

ISSN: 2059-6014

Article publication date: 18 April 2024

Issue publication date: 20 May 2024

110

Abstract

Purpose

The purpose of this paper is to empirically investigate the impact of organizational intellectual capital (IC) components on absorptive capacity (ACAP) such as potential absorptive capacity (PACAP) and realized absorptive capacity (RACAP). Furthermore, it attempts to investigate the mechanism through which PACAP and RACAP jointly influence innovation strategies (i.e.) exploitative and exploratory innovations.

Design/methodology/approach

This is an explanatory research using a deductive approach. This study uses survey data from 184 manufacturing export firms analyzed through partial least squares structural equation modelling.

Findings

The results have found that the cognitive and social capital of a firm positively affects PACAP and RACAP, whereas relational capital has a significant effect on RACAP. Moreover, the study reveals that both potential and realized absorptive capacities considerably lead to the development of organizational exploitative and exploratory innovation strategies.

Research limitations/implications

The research focused on two driving factors, i.e. IC components and ACAP dimensions, and overlooked how each component of IC and ACAP influences ambidextrous innovative strategy.

Practical implications

Providing managers with insights about the critical role of developing IC to facilitate the transfer and exchange of crucial absorptive capacity necessary for ambidextrous innovative strategy.

Originality/value

This study makes a significant contribution to the existing literature by highlighting the importance of ACAP and provides useful insights for firms in developing economies to improve their exploitative and exploratory innovation capability. This study likewise reveals the significance of the four dimensions of IC, which can facilitate bringing in knowledge from developing economies.

Keywords

Acknowledgements

Disclosure statement: The authors disclose that no potential conflict of interest is linked with the study.

Citation

Huma, S., Muslim, S. and Ahmed, W. (2024), "Understanding the role of organizational intellectual capital on developing absorptive capacity to strategize innovation ambidexterity", Review of International Business and Strategy, Vol. 34 No. 3, pp. 433-453. https://doi.org/10.1108/RIBS-08-2023-0088

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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