The moderating effect of absorptive capacity on the technology search and innovation quality relationship in high-tech manufacturing firms

Abstract

Based on the knowledge-based view, we conceptualize the technology search of high-tech manufacturing firms into three dimensions, namely search breadth, search depth, and balanced search, and construct the functional paths of the relationships between the different technology search dimensions and innovation quality of high-tech manufacturing firms. Grounded in absorptive capacity theory, we analyze how such relationships will change with the absorptive capacity level. Using data from China’s high-tech manufacturing industry from 2009 to 2017, we construct a panel data model to test the moderating effect of absorptive capacity on such relationships. Our research findings suggest: (i) Technology search breadth and depth each have a significant, inverted U-shaped relationship with innovation quality, i.e., technology search breadth and depth have an optimal point, and innovation quality exhibits an initial increasing and then decreasing trend. (ii) Balanced search has a significant positive relationship with innovation quality, i.e., there is a balanced point between technology search breadth and depth, and the higher the balance point is, the higher is innovation quality. (iii)Absorptive capacity does not merely positively moderate the relationship between technology search and innovation quality, but has different moderating effects under different search levels.