Absorptive capacity for market knowledge and knowledge creation outcomes: the case of Thai SMEs

Abstract

ABSTRACT Absorptive Capacity (ACAP) helps firms acquire, assimilate, and utilise new knowledge. Drawing on crucial managerial perspectives, this study employs a Partial Least Squares-Structural Equation Model (PLS-SEM) to scrutinise the various dimensions of ACAP (e.g. routines versus extra work, organisational culture, leadership, and the trustworthiness of knowledge sources) concerning market knowledge and knowledge creation outcomes (e.g. knowledge creation activities and firm’s private knowledge) among small and medium enterprises (SMEs) in Thailand. The findings indicate that all dimensions, with the exception of extra work, contribute significantly to the augmentation of firm-specific knowledge. However, only routines and knowledge-oriented leadership demonstrate a positive association with knowledge-creation activities. The results suggested that managers and top executives of SMEs should emphasise non-financial rewards more, create knowledge learning routines, and support the learning culture to enhance the ACAP for market knowledge.