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Article

T. Ramayah, Pedro Soto-Acosta, Khoo Kah Kheng and Imran Mahmud

Firms' knowledge-processing capabilities have a central role in achieving innovation performance and competitive advantage. Absorptive capacity capabilities and innovation

Abstract

Purpose

Firms' knowledge-processing capabilities have a central role in achieving innovation performance and competitive advantage. Absorptive capacity capabilities and innovation are viewed as essential for enterprise success. Absorptive capacity is deemed as a highly important organizational capability to recognize value and assimilate both external and internal knowledge in order to enhance firm innovation. The aim of this study is to determine if innovation performance can be improved through absorptive capacity (knowledge acquisition, dissemination and utilization), when it is supported by internal (firm experience) and external knowledge sources (R&D cooperation and contracted R&D).

Design/methodology/approach

A quantitative methodology based on employing a structured questionnaire was used for data collection. The proposed research model and its associated hypotheses are tested by using Partial Least Squares (PLS) structural equation modelling (SEM) on a data set of 248 manufacturing companies located in the Northern Region of Malaysia.

Findings

Results showed that firms' experience is significantly related to absorptive capacity, while for R&D cooperation and contracted R&D findings were mixed. In addition, absorptive capacity was found as a strong predictor of innovation performance.

Originality/value

One of the defining features of competition in many industries has been the extremely rapid pace of technological change, marked by a continuous stream of innovations. Manufacturing firms, therefore, face the challenge of nurturing existing knowledge and developing novel knowledge in order to create new business opportunities. This study makes valuable contributions with regard to understanding the behavioural of manufacturing firms towards process and product innovation.

Details

Business Process Management Journal, vol. 26 no. 5
Type: Research Article
ISSN: 1463-7154

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Article

Xueyuan Liu, Muzhen Shen, Wenjing Ding and Xiande Zhao

In innovation networks, firm innovation performance is affected by external tie strength and internal knowledge absorptive capacity. This study aims to empirically examine…

Abstract

Purpose

In innovation networks, firm innovation performance is affected by external tie strength and internal knowledge absorptive capacity. This study aims to empirically examine the path relationship between tie strength, absorptive capacity and firm innovation performance in Chinese manufacturing industries, thus enhance our understanding on the mechanism between innovation network and innovation performance.

Design/methodology/approach

The authors have conducted a survey among Chinese manufacturers in four industries (textile and garment, household appliance, IT and electronics and motor vehicle assemblers) that are located in North, East, Central and South China, respectively, with a valid response from 278 manufacturers. Structural equation model is used to analyze the results.

Findings

This study demonstrates that in Chinese Manufacturing industry, tie strength is positively related to innovation performance. The authors also find that absorptive capacity has a positive impact on innovation performance and it mediates the relationship between tie strength and innovation performance. Then, the authors analyze the effect of ownership, industry and sub-region, and the results show that in private firms and traditional manufacturers, and the firms located in North and Eastern China, tie strength has no direct effect on innovation outcomes, but it can influence innovation indirectly through absorptive capacity.

Originality/value

This study further supports that in Chinese guanxi culture, strong ties with other innovation partners can improve the firm’s absorptive capacity and thus improve innovation performance. The results also suggest that a firm’s absorptive capacity has a significant mediating effect on the relationship between tie strength and innovation performance.

Details

Nankai Business Review International, vol. 8 no. 4
Type: Research Article
ISSN: 2040-8749

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Article

Lei Wang, Jun Li and Shaoqing Huang

The purpose of this paper is to develop and empirically test a theoretical framework examining how local network ties and global network ties affect firms’ innovation

Abstract

Purpose

The purpose of this paper is to develop and empirically test a theoretical framework examining how local network ties and global network ties affect firms’ innovation performance via their absorptive capacities.

Design/methodology/approach

The conceptual framework is empirically tested in a field study with multi-source data collected from a sample of 297 manufacturing firms located in four. Manufacturing clusters in the south-eastern Yangtze River Delta of China. Hypotheses were tested with the use of path analysis with maximum likelihood robust estimates through the structural equation modelling approach.

Findings

The asymmetry between local network ties (LNT) and global network ties (GNT) in terms of influences on firms’ innovation performance is confirmed by empirical tests. LNT not only significantly and positively contribute to firms’ innovation performance directly but also enhance it indirectly via absorptive capability, whereas GNT exhibit only marginal influence on innovation performance. GNT are shown to boost innovation performance (IP) only indirectly via firms’ absorptive capacities. Knowledge heterogeneity and the difference between domestic and multinational firms’ institutional environment are considered to be the main causes of the asymmetric effects.

Originality/value

While the previous literature either focused on the mediating role of firms’ knowledge absorptive capacities or investigated the effects of social networks separately, this study incorporates both mechanisms into a single analytical framework to better account for the interactions between network effects and absorptive capacities. The results challenge some previous studies positing that GNT are stronger determinants than LNT in shaping a local firm’s innovation capacity in emerging economies, and the findings emphasize the importance of absorptive capacity in helping local enterprises to leverage external linkages to enhance firm’s innovation performance.

Details

Journal of Business & Industrial Marketing, vol. 33 no. 3
Type: Research Article
ISSN: 0885-8624

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Article

Roberto Chierici, Alice Mazzucchelli, Alexeis Garcia-Perez and Demetris Vrontis

The purpose of this paper is to empirically investigate how big data collected from social media contribute to knowledge management practices, innovation processes and…

Abstract

Purpose

The purpose of this paper is to empirically investigate how big data collected from social media contribute to knowledge management practices, innovation processes and business performance.

Design/methodology/approach

The study used 418 questionnaires collected from firms that actively invest in marketing, advertising and communication in the Italian market. The hypotheses testing and analysis were conducted using structural equation modeling.

Findings

The results reveal that customers’ data gathered from social media produce different effects on knowledge management practices and firms’ innovation capacity. Furthermore, increased innovation capacity turned out to affect customer relationship performance directly, while it contributes to gain better financial performance only when it is used to gain relational outcomes.

Originality/value

The outcomes of the study help firms to develop a clear understanding about which big data retrieved from social media can be useful to improve their knowledge management practices and enhance their innovation capacity. Moreover, by investigating the mediating role of big data knowledge management in the context of social media knowledge acquisition and innovation capacity, this study also extends the mediation variables used to understand the relationship between knowledge capabilities and practices and innovation constructs.

Details

Management Decision, vol. 57 no. 8
Type: Research Article
ISSN: 0025-1747

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Article

Imre Fertő, Adrienn Molnár and József Tóth

– The purpose of this paper is to investigate the innovation performance in the Hungarian food chain using the concept of open innovation.

Abstract

Purpose

The purpose of this paper is to investigate the innovation performance in the Hungarian food chain using the concept of open innovation.

Design/methodology/approach

Empirical analysis is based on the data from a 2014 survey of more than 300 small- and medium-sized agricultural producers, food processors and food retailers. The authors analyse innovation performance taking into account not only the direct impacts of external knowledge inflows and absorptive capacity, but also the indirect effect of external knowledge inflows mediated by the existence of potentially complementary internal resources (absorptive capacity). The authors determine the impact of open innovation and a company’s absorptive capacity on innovation performance employing two stage approaches. First, the authors apply a semi-non parametric probit model. Second, the authors run cluster analysis to categorize companies based on their open innovation, absorptive capacity, firm and managerial characteristics.

Findings

Results imply the openness along the food chain may decrease the introduction time of innovation in all areas of innovation, as well the innovation propensity. The openness towards competitors may decrease the introduction time of innovation with regard to technological innovation, but it may increase with regard to product innovation, as well the innovation propensity. The absorptive capacity decreases the introduction time of technological product, organizational and market innovation. There is a positive relationship between the use of external knowledge (when it is defined as openness with competitors) and own innovation capacity with regard to innovation propensity, but not when it is defined as openness along the food chain. The enterprises of the sample are dividing into two groups: innovative (dominated by processors) and not innovative ones (dominated by producers and retailers).

Research limitations/implications

Some limitations of the paper are worth mentioning. The study is limited in its scope with regard to the research setting and the unit of analysis (Hungarian food chain). With regard to the former, our sample consists of 302 SMEs along the food chain, almost equally distributed as producers, processors and retailers. At the end of 2014 in Hungary there were 7,766 producers, 2,681 processors and 6,420 retailers in this category, which means 1.3 – 3.7 per cent coverage (Agrárgazdasági Kutatóintézet, 2014). Regarding the latter, the paper defines food chain in a narrow sense (three levels); therefore, the results represent the perspectives of a limited number of food chain partners (producers, processors, retailers). Were the definition to be widened, input from additional members would be necessary (such as suppliers of suppliers, customers of customers, third parties or competitors). Nevertheless, although the scope may be narrow, it is appropriate for our objective. Future research is recommended to overcome the paper’s limitations (i.e. extend its scope to other countries, sectors and levels of chain).

Practical implications

The analysis provides valuable inputs for policy makers and SMEs along the food chain that wish to build and improve (open) innovation system. Policy makers would need more targeted innovation development programmes in order to solve the tight innovation bottlenecks. These programmes should target first of all at expanding the absorptive capacities of the food chain’s enterprises. The authors also need further research in order to investigate how much the restricted use of open innovation systems in the Hungarian food enterprises is linked to the cost and benefits of creation such systems.

Originality/value

The authors analyse innovation performance taking into account not only the direct impacts of external knowledge inflows and absorptive capacity, but also the indirect effect of external knowledge inflows mediated by the existence of potentially complementary internal resources (absorptive capacity).

Details

British Food Journal, vol. 118 no. 6
Type: Research Article
ISSN: 0007-070X

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Article

Suming Wu, Xiuhao Ding, Ruihong Liu and Hui Gao

Open innovation and information systems have been key topics in the theoretical domain, but little empirical research thoroughly examines how information technology (IT…

Abstract

Purpose

Open innovation and information systems have been key topics in the theoretical domain, but little empirical research thoroughly examines how information technology (IT) capability affects open innovation performance. Thus, the purpose of this paper is to explore the relationship between IT capability and open innovation performance and to expose the inner mechanism at the firm level.

Design/methodology/approach

This paper collected firm-level data in China; 232 usable questionnaires from different firms were collected. Then, the study used a structural equation model by AMOS for hypothesis testing.

Findings

The results indicate that both internal IT capability and external IT capability have positive impacts on open innovation performance; potential absorptive capacity and realized absorptive capacity mediate the relationship between external IT capability and open innovation performance. Additionally, realized absorptive capacity plays a mediating role in the relationship between internal IT capability and open innovation performance.

Practical implications

These findings indicate that practitioners should pay attention to the important relationship between absorptive capacity and IT capability and open innovation performance in Chinese businesses.

Originality/value

Existing research has emphasized the influence of IT on open innovation, but empirical studies have not thoroughly focused on the inner mechanisms of the effect of IT capability on open innovation performance. Drawing on firm capability theory, this paper classifies IT capability as internal and external IT capability and absorptive capacity as potential and realized absorptive capacity. Then, this paper confirms the mediating role of absorptive capacity between IT capability and open innovation performance.

Details

European Journal of Innovation Management, vol. 24 no. 1
Type: Research Article
ISSN: 1460-1060

Keywords

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Article

Manzoor Ul Akram, Koustab Ghosh and Rojers P. Joseph

This study aims to investigate the external knowledge search behaviors in terms of search breadth and search depth in family firms and the resultant product innovation in…

Abstract

Purpose

This study aims to investigate the external knowledge search behaviors in terms of search breadth and search depth in family firms and the resultant product innovation in Indian context. The authors theorize the mediating role of absorptive capacity (potential and realized absorptive capacity) between knowledge sourcing from external sources and product innovation. Further, the authors examine the moderating role of crucial internal social capital of the family firm in enhancing the use of external knowledge for firm innovation activities.

Design/methodology/approach

The study uses a quantitative research design taking single informant for collection of data from 151 family small and medium enterprises in automotive sector in India. The authors use structural equation modeling to test hypothesized relationships.

Findings

The findings indicate that both search breadth and search depth of family firms are positively associated with product innovation in family firms. The authors also find evidence for partial mediating role of potential and realized absorptive capacity in the relationship between search breadth and innovation and search depth and innovation. The results show how family firms learning taking place while scanning external knowledge sources in terms of external absorptive capacity routines. Finally, the authors find that family firm internal social capital positively moderate the relationship between search breadth and depth, and product innovation.

Practical implications

Family firms need to innovate to remain relevant in the long-run and as such development of superior capabilities is of great significance to them. Family firm managers must be open to external knowledge as such knowledge help them improve the firm level of innovation through absorptive capacity. Further, family firms must realize and act upon the importance of their social capital for the integration and utilization of acquired knowledge.

Originality/value

This paper is amongst a few papers that take dynamic capability views of innovation in family firms wherein the authors theorize how external search breadth and depth lead to the development of potential and realized absorptive capacity in family firms. The importance of family firm internal social capital as a strong integrating and knowledge sharing mechanism that helps family firms transform external knowledge into innovation is also highlighted.

Details

VINE Journal of Information and Knowledge Management Systems, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2059-5891

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Article

Lisa A. Pace and Ian Miles

Firms need to develop absorptive capacities to effectively source and exploit knowledge relevant to environmental behaviour for their own innovation activity…

Abstract

Purpose

Firms need to develop absorptive capacities to effectively source and exploit knowledge relevant to environmental behaviour for their own innovation activity. Business-to-business interactions can represent a significant route through which knowledge and resources about environmental innovations are transferred along the supply chain. The purpose of this paper is to explore how firms exploit business partnerships in order to build capacity for environmental innovation. In order to do so, it investigates two elements of B2B interactions – partner alignment and compatibility – and their influence on absorptive capacity-building.

Design/methodology/approach

This paper is based on a qualitative interview study of knowledge intensive business services (KIBS) operating in the environmental goods and services sector and their clients involved in adopting environmental innovations. Matched pairs of engineering consulting firms and their clients – tourism accommodation establishments – were selected as a sampling frame in order to study the influence of partner alignment and compatibility on the exchange of environmentally relevant knowledge and competencies.

Findings

The findings show that the synergistic attributes of business partners influence absorptive capacity-building and give rise to different patterns of interaction of KIBS with their client. The B2B interactions investigated are characterised by alignment along multiple objectives about the relevance of environmental behaviour. Furthermore, the compatibility of the partners’ competences is a key determinant of environmental innovation outcome.

Practical implications

The study highlights the role of managers in identifying and selecting those business partnerships that accrue greater potential benefit for accessing resources and competencies for eco-innovation.

Originality/value

The study contributes to the literature on absorptive capacity and innovation by demonstrating how B2B interactions – in this study, the interaction of KIBS with their clients – influence the capacity of firms to adopt environmental innovations which is an area of study that deserves further attention.

Details

European Journal of Innovation Management, vol. 23 no. 4
Type: Research Article
ISSN: 1460-1060

Keywords

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Article

María Isabel Roldán Bravo, Antonia Ruiz Moreno and Francisco Javier Llorens-Montes

This paper aims to seek to explain the influence of power asymmetry and the moderating role of an organization’s absorptive and desorptive capacity on enhancing supply…

Abstract

Purpose

This paper aims to seek to explain the influence of power asymmetry and the moderating role of an organization’s absorptive and desorptive capacity on enhancing supply chain competence from its orientation to open innovation with its supply network.

Design/methodology/approach

To perform this study, the authors use data collected from 262 European firms. They apply regression analysis to test the moderating role of an organization’s absorptive and desorptive capacity on enhancing its supply chain competence from its orientation to open innovation.

Findings

The results confirm both the influence of power asymmetry and absorptive capacity on obtaining benefits that derive from an organization’s orientation to open innovation. The results do not, however, support the moderating effect of an organization’s desorptive capacity. Subsequent analyses performed in the study show that organizations that achieve complementarity among their own absorptive capacity and the capacities of its supply network manage to obtain greater benefits from its orientation to open innovation.

Originality/value

This paper responds to the need to study innovation in the context of a supply network and respond to calls in the literature on open innovation and supply chain management for the need to study the moderating role of absorptive and desorptive capacity.

Details

Supply Chain Management: An International Journal, vol. 21 no. 5
Type: Research Article
ISSN: 1359-8546

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Article

Zhi-hong Song

– The purpose of this paper is to examine the relationships among organizational learning, absorptive capacity, imitation and innovation in the Chinese context.

Abstract

Purpose

The purpose of this paper is to examine the relationships among organizational learning, absorptive capacity, imitation and innovation in the Chinese context.

Design/methodology/approach

Based on the organizational learning theory and innovation theory, the paper presents a framework linking organizational learning, absorptive capacity, imitation and innovation. Using a key informant technique, a survey questionnaire was designed and sent to the middle or top management managers of 115 firms located in Peking, People’s Republic (PR) of China. Structural equation modeling (SEM) with the maximum likelihood (ML) estimation procedures was applied to test the hypotheses developed in the research.

Findings

The empirical results show that both organizational learning and absorptive capacity have positive impacts on innovation; imitation has a positive impact on absorptive capacity; absorptive capacity mediates the relationship between imitation and innovation.

Practical implications

This study has implications for firms aiming to enhance innovation by organizational learning, absorptive capacity and imitation.

Originality/value

Despite the number of studies concerning organizational learning, absorptive capacity, imitation and innovation, research that encompasses the interrelationships between the four concepts simultaneously remains scarce. The paper provides a framework linking organizational learning, imitation, absorptive capacity and innovation, and it advances the argument that absorptive capacity is an important factor in predicting the Chinese firms’ transition from imitation to innovation.

Details

Chinese Management Studies, vol. 9 no. 1
Type: Research Article
ISSN: 1750-614X

Keywords

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