Role of Knowledge Creation and Absorptive Capacity: A Panel Data Study of Innovation

Kamran Hameed,Mubbasher Munir,Noman Arshed

doi:10.33215/sjom.v4i2.579

Kamran Hameed, Mubbasher Munir + Show 1 more

Open Access

https://doi.org/10.33215/sjom.v4i2.579

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Abstract

Purpose- Knowledge creation refers to the ability of firms to create new knowledge that starts from individuals to integrating the firms and then the overall economy. This study suggests that knowledge acquisition in a country has a significant relationship with innovative performance. Design/Methodology- Data from 48 highly HDI countries is taken from World Bank and World Economic Forum. Based on 480 country-year observations in a panel mediator model, it is revealed that the national efforts of boosting knowledge acquisition influence the firms’ innovative performance. Findings- Further, it is found that absorptive capacity in the employability of knowledgeable workers works as a mediator between knowledge acquisition and innovation. Whereby higher knowledge acquisition leads to higher absorptive capacity and higher innovation. Practical Implications- This study builds a quantitative model for the macroeconomic context of knowledge-based view.

Highlights

In literature, various approaches have been used to address how firms can achieve sustainable competitive advantage
While exploring the controlling factors, the increase in the development expenditures, institutions, and infrastructure significantly increases the innovations in the economy
Geographical and institutional infrastructure development mobilizes technical resources from one place to another, which works as an essential factor in the innovation process (Feldman & Florida, 1994)

Summary

Introduction

Various approaches have been used to address how firms can achieve sustainable competitive advantage. One of the dominant approaches, ‘Resource-based view’ (RBV), emerged, discussing internal resources only as firm-level strategies are more prone to creating competitive advantage but less focused on rapid change in the external economic environment. In an extension in resource-based view, ‘knowledgebased view’ (KBV) of the firms considers as an emerging perspective that explains about achieving competitive advantage through knowledge-based assets, other than the conventional factor of production such as labor, capital, and land (Martín-de-Castro, Delgado-Verde, López-Sáez, & Navas-López, 2011). In the last two decades, studies within the field of management literature have focused on the importance of knowledge management in achieving innovative performance. The knowledge management field has emerged and has become critical approach to discuss innovation

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