New Insights to Absorptive Capacity: A study into Knowledge Stocks and Social Integration Mechanisms

Abstract

Building on Zahra and George's Reconceptualisation of Absorptive Capacity, this paper makes two key contributions to Absorptive Capacity theory. First and most instrumentally, it provides one of the first empirical accounts of the Social Integration Mechanism, the factors that influence the conversion of Potential Absorptive Capacity (i.e. knowledge stocks) to Realized Absorptive Capacity (the primary mechanism for profit creation; ibid, p191). Secondly, in regards to Potential Absorptive Capacity (PAC), it demonstrates that knowledge stocks are better interpreted as a formative, higher order construct consisting of three dimensions: individually-held knowledge, network-base knowledge from Strong ties, and network-based knowledge from Weak ties. In doing so, it provides both empirical evidence to support Zahra and George's original model, as well as a finer grained interpretation to their model.