Abstract
Externally oriented capabilities have gained increasing attention because of their significant potential to stimulate innovative activities in companies. Yet, there is little understanding of these capabilities in relation to corporate entrepreneurship, in particular in the context of developing countries. The findings from a sample of 126 small and medium supplier companies providing products and services to the mining industry in Iran indicate that a firm’s absorptive capacity enhances the level of corporate entrepreneurship. Moreover, firms with greater knowledge search can more effectively utilize their absorptive capacity for corporate entrepreneurship. The main contribution of this research is connecting externally oriented capabilities to corporate entrepreneurship and showing the way SMEs in developing countries can fill their knowledge gaps to proceed to corporate entrepreneurial purposes.
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