The roles of dual networks and ties on absorptive capacity in SMEs: the complementary perspective

Abstract

Drawing from social network theory with dual embeddedness and dual ties perspectives, the main purpose of this study is to examine the differing influences of weak ties and strong ties in the supply chain network and competitive network on potential and realised absorptive capacity. According to the empirical results, the weak ties both in the supply chain network and competitive network are positively related to a firm’s potential absorptive capacity, while weak ties in the competitive network are more powerful in improving potential capability. The strong ties both in the supply chain network and competitive network are positively related to a firm’s realised absorptive capability, while strong ties in the supply chain network are more effective in realised absorptive capability. Besides, complementary term (the product term of potential absorptive capacity and realised absorptive capacity) has significant effects on a firm’s innovative performance. Finally, we discuss implications of this research and offer suggestions for future research.