Revisiting the relationship between knowledge search breadth and firm innovation

Abstract

PurposeThe purpose of this paper is to show that the high learning ability associated with innovative firms enables these firms to conduct a broad knowledge search based on a knowledge transfer perspective. This paper further shows that knowledge tacitness and relationship between knowledge senders and receivers will accentuate this positive relationship.Design/methodology/approachTo test the proposed model, a pooled panel data set based on 102 Korean firms that participated in three waves of National Korean Innovation Surveys conducted in 2002, 2005, and 2008 is constructed. Since the independent variables are lagged in the analysis, the panel data comprised 204 firm-year observations of the 102 firms. Generalized estimating equations were used to analyze the effect of innovation on knowledge search breadth.FindingsThe authors found that absorptive capacity mediated the relationship between innovation and knowledge search breadth. This mediating relationship was stronger when a firm is not affiliated with any business group and operates in the high-technology industry.Research limitations/implicationsThis paper showed that innovation is not only a consequence of knowledge search as found in existing literature, but also is a precursor to knowledge search.Originality/valueThis paper developed a novel theoretical model on innovation and knowledge search that highlights a virtuous cycle between innovation and knowledge search. Methodologically, the pooled panel data controlled for lagged effect and enhanced efficiency of econometric models, thus offered several advantages over cross-sectional data.