Linking environmental forces, absorptive capacity, information sharing and innovation performance

Abstract

PurposeThis study seeks to understand how regulatory and competitive forces impact firms' actions and innovation performance. The study investigates how firms strategize internally and externally to address regulatory and competitive forces, and how such actions influence firms' innovation performance.Design/methodology/approachThe data were collected via a survey of 217 managers of business organizations in Nigeria.FindingsRegulatory forces have a positive relationship with both absorptive capacity (AC) and information sharing (IS). Competitive forces, on the other hand, only have a negative relationship with IS but not with AC. AC has a positive relationship with innovation performance, while IS, surprisingly, does not have a positive relationship with innovation performance.Originality/valueThe study contributes to knowledge by empirically validating the relationships between environmental forces and innovation performance; more importantly, the study uncovers the underlying factors, i.e. IS and AC that link environmental forces and firms' innovation performance.