Absorptive Capacity Perspective Research Articles

The Impact of Foreign Direct Investment on Green Technology Innovation: Evidence from the Threshold Effect of Absorptive Capacity

ABSTRACT Promoting green technology innovation has become a pivotal driver for nations worldwide to achieve sustainable development as a result of the increasingly pressing challenge posed by climate change. As one of the main forms of modern capital internationalization, foreign direct investment (FDI) has become a focal point for countries aiming to leverage its potential for green technology innovation. This article employs a panel threshold model to examine the impact of FDI on green technology innovation in China from the perspective of absorptive capacity, primarily characterized by economic advancement, infrastructure construction, and environmental regulation. The results demonstrate that, first, the impact of FDI on green technology innovation exhibits a distinct threshold effect; when absorptive capacity falls below the threshold value, FDI can impede green technology innovation, but when absorptive capacity exceeds the threshold value, FDI can facilitate green technology innovation. Second, the impact of FDI on green technology innovation is more pronounced in the eastern region and the southeastern region of Hu line. Third, the impact of FDI on green technology innovation reveals a boundary effect within provincial border cities. However, the radiation effect of FDI on green technology innovation demonstrates limitations. The advancement of green technology innovation can effectively address environmental challenges. This article enhances our understanding of the impact of absorptive capacity on FDI and the role that plays on green technology innovation. The contribution of this work will broaden understanding of the relationship between FDI and green technology innovation.

Key antecedents and consequences of blockchain technology adoption in the wine industry: a multiple case study analysis

PurposeThe present study aims to identify the antecedents and consequences of blockchain adoption in the wine industry from the absorptive capacity perspective through a multiple case study approach.Design/methodology/approachA multiple case study approach was utilized, wherein data was gathered through semi-structured interviews and secondary sources of information from the five Italian innovative wineries.FindingsThe results show that the dynamic capabilities of wineries and the creation of strategic partnerships are common conditions for the adoption of blockchain technology (BCT). In addition, findings reveal that creating value for all supply chain stakeholders and preventing counterfeit products are the most important consequences of BCT adoption.Research limitations/implicationsThis study fills a gap in the literature by investigating the drivers of BCT technology adoption under two theoretical lenses, Absorptive capacity and Dynamic capability theories, confirming the usefulness of these two theories in explaining the process of innovation adoption.Originality/valueThe originality of our research study lies in its investigation of the antecedents and consequences of BCT adoption in the wine supply chain, focusing specifically on the role of dynamic capabilities, knowledge acquisition and assimilation, strategic partnerships and open interactions with external actors in driving technological innovation and the successful implementation of BCT in the wine industry. By offering empirical data on the drivers and impacts of BCT adoption, as well as theoretical implications for technological innovation and value creation in the wine sector, our study contributes to filling gaps in the existing literature and provides practical insights for wineries and AgTechs seeking to integrate BCT into their business models.

Internationalization rhythm and innovation performance: The effects of internationalization speed, organizational slack, and competitive intensity

While studies show that different internationalization rhythms may result in differing financial performances or cost efficiencies, the relationship between internationalization rhythms and innovation performance remains underexplored. More importantly, the moderating role of speed on this relationship has not been examined, given the limits to how much expansion firms can absorb within a given period without jeopardizing operations and as time compression diseconomies may emerge with high-speed expansion. Here, we apply an absorptive capacity perspective to examine the moderating role of internationalization speed. Unbalanced panel data from Chinese multinational enterprises between 2008 and 2014 reveal a negative relationship between parent companies’ internationalization rhythm and innovation performance, with stronger effects under high internationalization speed. Meanwhile, this relationship weakens (strengthens) with increasing internal organizational slack (external competitive intensity).

Sourcing for high technology innovation: Engaging to absorb knowledge pre-contract

This study investigates how firms can identify, access, and capitalize on viable innovation in the high technology supply market during the pre-contractual phase of relationships. The industrial landscape is changing rapidly due to technological advancements like automation and electrification, leading traditional industries to explore new avenues for knowledge and partner selection. However, identifying, assessing, and trusting suppliers with whom firms can enter a relationship is a complex task. Therefore, the study adopts the absorptive capacity perspective for conceptualizing the supplier selection process, focusing on the pre-contractual phase. Based on two in-depth case studies in the automotive industry, we find that supplier selection can be assisted with higher levels of engagement, coordination, and alignment internally with different firm stakeholders and externally with the larger supply market. This study illustrates that new actors bring disruptive innovation into the automotive industry, and the knowledge is absorbed during supplier selection, facilitated by fostering higher levels of engagement, coordination, and alignment both internally among various stakeholders within the firm and externally within the broader supply market. This study significantly advances the understanding of supplier selection practices in the context of high technology innovation. The theoretical contributions made through our empirical investigations enhance the knowledge base on sourcing strategies, shed light on the complexities of supplier selection, and offer practical implications for firms aiming to navigate the rapidly changing landscape of technological advancements.

Exploiting organizations' innovation performance via big data analytics: an absorptive knowledge perspective

PurposeThe advantages of applying big data analytics for organizations to boost innovation performance are enormous. By collecting and analysing substantial amounts of data, firms can discern what works for their customer needs and update existing products while innovating new ones. Notwithstanding the evidence about the effects of big data analytics, the link between big data analytics and innovation performance is still underestimated. Especially in today's fast-changing and complicated environments, companies cannot simply take big data analytics as one innovative technical tool without fully understanding how to deploy it effectively.Design/methodology/approachThis study tries to investigate this relationship by building on the knowledge absorptive capacity perspective. The authors conceptualized effective use of big data analytics tools as one general absorptive capacity rather than a simple technical element or skill. Specifically, effectively utilize big data analytics tools can provide values and insights for new product innovation performance in a turbulent environment. Using online survey data from 108 managers, the authors assessed their hypotheses by applying the structural equation modelling method.FindingsThe authors found that big data analytics capacity, which can be conceptualized as one absorptive capacity, can positively influence product innovation performance. The authors also found that environmental turbulence has strong moderation effects on these two main relationships.Originality/valueThese results establish big data analytics can be regarded as one absorptive capacity, which can positively boost an organization's innovation performance.

Regional differences and drivers of patent transfer-in between Chinese cities: a city absorptive capacity perspective

ABSTRACT Patent transfer-in is a crucial approach and source for regions to reduce R&D costs and develop innovative technologies. Referring to patent transfer records from the China National Intellectual Property Administration as the data source, this paper explores the drivers of patent transfer-in in Chinese cities using geographically and temporally weighted regression and geographical detectors. Results show that: (1) from 2013 to 2019, the quantity of urban patent transfer-in increased obviously and distributed heterogeneously. The Gini coefficient remained above 0.7, while the overall difference in patent transfer-in significantly declined. (2) The contribution of each influencing factor showed spatial heterogeneity. Foreign direct investment had a negative impact on the acquisition of patented technologies from other domestic cities in most cities. In addition, most cities within the Beijing-Tianjin-Hebei region had not benefited from the accumulation of urban human capital for patent transfer-in. (3) Regional economic development and R&D investment gradually became the dominant influencing factors of patent transfer-in at the city level. In 2019, the influencing factors showed relatively-balanced interactions, but the interactions between human capital and industrial scale remained high.

THE INFLUENCE OF ORGANIZATIONAL MEMORY ON INNOVATION PERFORMANCE OF PRIVATE ENTERPRISES: A MODERATING EFFECT BASED ON ABSORPTIVE CAPACITY

To survive in the fierce competition and its own limitations, private enterprises in China must innovate. Since most private enterprises lack material resources, it is realistic to rely on organizational memory to innovate. Based on the perspective of organizational memory, this paper explores the relationship between organizational memory, absorptive capacity and innovation performance. This paper collects data through questionnaire, and verifies the relationship between organizational memory and innovation performance by correlation analysis and regression analysis. It is found that organizational memory and innovation performance have a significant positive correlation at the level of 0.01, the correlation coefficient between organizational memory and innovation performance is 0.538 (P < 0.01), the correlation coefficient between declarative organizational memory and innovation performance is 0.468 (P < 0.01). The correlation coefficient between process organizational memory and innovation performance is 0.308 (P < 0.01). The results show that there is a significant positive correlation between organizational memory and innovation performance of private enterprises. Potential absorptive capacity has a significant moderating effect between organizational memory dimensions and innovation performance, while real absorptive capacity has a significant moderating effect between organizational memory dimensions and innovation performance. Thus, improving the organizational memory level and absorptive capacity of private enterprises has a positive role in promoting their innovation performance. This study examines the relationship between organizational memory, absorptive capacity and innovation performance, which expands the scope of organizational memory research, and provides a reference for private enterprise innovation from the perspective of organizational memory and absorptive capacity.

Leading organisational learning in disadvantaged, low-performing Chilean schools: adaptation and innovation in times of disruption

ABSTRACT The crisis caused by COVID-19 disrupted education worldwide and intensified the difficulties faced by disadvantaged and low-performing schools, with school leaders playing a key role in developing capacity for organisational learning to face this challenge. Through a qualitative case study, this article explores how leaders of three Chilean schools, with support from external ministry advisors, developed adaptations and innovation in response to the disruption to ensure educational continuity, employing the perspective of absorptive capacity to identify, assimilate, and take advantage of information from external agents. Findings suggest that, during the pandemic, schools faced complex problems related with the disadvantage of their communities and their proposed solutions to these problems were mediated by their internal organisational conditions, the characteristics of external support agents and their interaction. The study discusses how school leaders can develop capacity for organisational learning with support from external agents to lead in disruptive times. Likewise, absorptive capacity provides a framework that facilitates the understanding of the factors that influence the opportunities for generating such adaptive solutions in disadvantaged and low-performing schools, while highlighting the importance of considering schools as part of an ecosystem that can enhance their capacity for improvement.

Exploring the Roles of Social Networks and Absorptive Capacity in Local Firms’ Strategic Flexibility: An Empirical Investigation of Chinese Firms

In an era of VUCA, strategic flexibility may play a greater role for a company to achieve competitive advantage than innovation. Based on an integrated social network and absorptive capacity perspective, this article proposes a conceptual model in which the local firm’s strategic flexibility is affected by its position in global production network and its internal absorptive capacity. Using a sample of 276 local manufacturers located in the Yangtze River Delta, China, the roles of social networks and absorptive capacity in strategic flexibility are identified, and the results indicate that by occupying a central and strong-tie-abundant network position, local firms can gain more resource flexibility; and absorptive capacity possessed by a local firm plays an active role in coordination flexibility.

Knowledge transfer within MNC hotel subsidiaries: An absorptive capacity perspective

This study explores the process of transferring knowledge from multinational-corporation (MNC) hotels to their subsidiaries to advance company strategies. In particular, it examines critical factors that can forestall knowledge transfer through the lens of absorptive capacity. This study revisits the four dimensions of absorptive capacity (acquisition, assimilation, transformation, and exploitation) to understand the challenges involved in transferring knowledge from MNCs to subsidiaries. We argue that several fundamental aspects of the process influence absorptive capacity, potentially interfering with knowledge transfer. Using a qualitative approach, semi-structured interviews were conducted with four different types of actors (expatriate and local managers, a regional executive, and a policymaker). The results reveal that competencies (e.g. education) regulate the process of acquiring knowledge, while insufficient experience (technical skills and expertise) and historical background (explicitly related to the consequences of colonisation, including a local inferiority complex) affect the assimilation and transformation of knowledge. Next, limited opportunities, notably a reluctance to hire local managers and local managers with uneven qualifications, affect transformation and exploitation. Finally, cultural discord (e.g. recognising cultural differences, such as ethnic groups, religion, and customs) and communication barriers (e.g. verbal and non-verbal communications) influence the acquisition, assimilation, and transformation process, which, in the end, arbitrate knowledge exploitation. The findings suggest that the country's historical experience has considerable ramifications for absorptive capacity.

A study on artificial intelligence orientation and new venture performance

ABSTRACT Artificial intelligence (AI) is the new engine of future economic development. As a new force in the market economy, the issue of whether AI is related to the higher performance of new ventures in emerging economies still requires empirical evidence. Using content analysis and taking the 2010–2019 A-share listed new ventures as panel data, this paper tests the relationship and boundary conditions of AI orientation (AIO) on the performance of new ventures from the perspective of absorptive capacity. We find that AIO is positively related to new venture performance, where firm growth and the level of regional economic development have a significant positive moderating effect. This paper provides empirical evidence on the relationship between AIO and new venture performance.

Information systems adoption and knowledge performance: An absorptive capacity perspective.

As strategic assets for organizations, information systems (IS) have been adopted to enhance organizational knowledge performance. Based on the absorptive capacity perspective, we investigated intertwined relationships among IS adoption, organizational capabilities, IS-enabled absorptive capacity, and organizational knowledge performance. We empirically examined our model with survey data from 417 IS employees of 21 different state governments in the United States. We find that: (1) IS adoption does not directly generate IS-enabled absorptive capacity; (2) organizational capabilities positively affect IS-enabled absorptive capacity; (3) synergies arising from complementarity between IS adoption and organizational capabilities have a positive impact on IS-enabled absorptive capacity; and (4) IS-enabled absorptive capacity significantly drives manager and employee knowledge performance. This research enriches the understanding of the relationships among IS adoption, organizational capabilities, and organizational knowledge performance in U.S. public sectors.

R&D Area Diversity and Innovation Quality: A Cross-functional Absorptive Capacity Perspective

R&D Area Diversity and Innovation Quality: A Cross-functional Absorptive Capacity Perspective

An empirical taxonomy of Knowledge-Intensive Business Services buyers: An Absorptive Capacity approach

The extant literature on the purchase of Knowledge-Intensive Business Services (KIBS) has dedicated limited attention to how the knowledge of buyers influences the acquisition of these services. This study proposes an empirical taxonomy to classify KIBS buying companies based on their capacity to absorb knowledge. It also assesses how their knowledge absorption profile influences the importance they attribute to KIBS purchases. Six constructs (knowledge base, research and development (R&D) activities, interaction with other organizations, attitude toward knowledge transfer, organizational structure for knowledge absorption, organizational culture for knowledge absorption) were used to collect empirically grounded information through a comprehensive survey conducted with 304 buying companies of KIBS. Our results suggest that KIBS buyers have four different knowledge absorption profiles - Low Absorptive Capacity, R&D-based Absorptive Capacity, Acquisition-based Absorptive Capacity, and Fully Developed Absorptive Capacity - which shape the importance attributed to the KIBS purchased. This study contributes to understanding the profiles of KIBS buyers using an absorptive capacity perspective and the implications for providers' selection decisions. By examining underdeveloped research themes that still require attention, this study assists practitioners, scholars, and policy-makers in addressing the challenges and mechanisms of knowledge transfer and innovation in companies buying KIBS.

Removing silos to enable data-driven decisions: The importance of marketing and IT knowledge, cooperation, and information quality

Business decision-making increasingly requires that the information technology (IT) and marketing functions work together. Despite their distinct objectives, marketing managers need improved access to data to drive strategy. Based on an absorptive-capacity perspective, this study examines how marketing and IT business knowledge at the executive level affect decision-making. Results indicate that IT business knowledge has a direct, positive effect on data-driven decision-making, and marketing business knowledge does not. In addition, information quality and marketing/IT cooperation have differential moderating effects.

Organizational Performance of a Public Higher Education Institution: An Analysis from the Perspective of Absorptive Capacity and Innovation

This article aims to identify the perception of students of Administration and Accounting Sciences about Perceived Organizational Performance from the perspective of Absorptive Capacity and Innovation within the UFCG. To this end, a quantitative, exploratory-descriptive approach was used, using the survey technique, together with the students of the UFCG Administration and Accounting Science courses. Out of 362 students (172 in the Administration course and 190 in the Accounting Science course), a sample of 223 responses was obtained. For data collection, the model of Oliveira et al. was adapted (2018). The questionnaire was applied from September to November 2019. For the construct, a Likert scale from 1 to 5 points was used. Factor analysis was applied. The results indicate that the Perceived Organizational Performance of the UFCG exerts positive influences on both Perceived Absorptive Capacity and Innovation, unlike what was found in the study of Oliveira et al. (2018). The results found demonstrate that the Organizational Performance perceived by students within the UFCG may be positively impacted by Perceived Innovation and Absorptive Capacity, reflecting the institution's abilities to identify and acquire knowledge in the external environment, assimilate it, internalize it, transform it and apply it, resulting in valuable products and services as advocated by Cohen and Levinthal (1990), Zahra & George (2002).

Threshold effects, technology purchasing, and firm outcomes: An absorptive capacity perspective

External technology purchasing is frequently adopted as a strategy to facilitate technology innovation and to enhance firm performance. However, research shows that there is considerable heterogeneity across firms with respect to innovation output and firm performance after technology purchasing. This study uses an absorptive capacity perspective in proposing the existence of an R&D employees threshold and a technology purchasing scale threshold. Using a sample of 1460 high-tech companies in China, we find support for both thresholds. We also find that the two variables are complementary with each other, jointly promoting innovation when both thresholds are crossed.

How do firms use virtual brand communities to improve innovation performance? Based on consumer participation and organizational learning perspectives

PurposeIn the context of virtual brand communities (VBCs), based on self-determination theory and organizational binary learning (OBL) theory, this study investigates the direct and indirect effects of various dimensions of consumer participation (CP) on firm innovation performance (FIP) and the mediating role of OBL. By introducing the perspective of knowledge absorptive capacity (KAC), this study examines the moderating effect of KAC on the relationship between OBL and TIP.Design/methodology/approachIn this study, 751 samples are collected from Chinese firms, and stratified adjusted regression analysis is used to conduct empirical tests.FindingsInformation provision or co-creation directly affects FIP; the latter is more significant than the former, while social interaction does not directly affect FIP. Exploitative or exploratory learning plays a mediating role in the relationship between information provision or co-creation and FIP. In contrast, exploratory learning plays a mediating role in the relationship between social interaction and FIP. KAC has a positive moderating effect on the relationship between exploitative learning or exploratory learning and FIP. When the firm has a low KAC, the improvement of FIP through exploratory learning is slight.Originality/valueIn VBCs, this study tries to divide the dimensions of CP. It also clarifies the mediating effect of OBL on CP and FIP. In addition, it explores the moderating effect of KAC on OBL and FIP. The conclusions of this study provide theoretical support and practical inspiration for firms to use VBCs to improve FIP.

Impacts of R&D investment on absorptive capacity and firm innovativeness: contingent roles of dysfunctional competition

PurposeDrawing upon relative absorptive capacity (AC) perspective, this study proposes a research model connecting R&D investment, three types of supply chain AC—AC from suppliers, customers and university and research institutes (U&RIs)—and firm innovativeness and investigates the contingent effects of dysfunctional competition on the link between R&D investment and supply chain AC.Design/methodology/approachThe authors used data collected from 262 manufacturers in three areas of China to empirically examine the conceptual model. The corresponding hypotheses were tested with structural equation modeling and regression analysis.FindingsThe empirical results demonstrate that AC from customers and AC from U&RIs play significant mediating roles in the relationship between R&D investment and firm innovativeness. Moreover, R&D investment has a significantly greater effect on AC from U&RIs under high levels of dysfunctional competition.Originality/valueFirst, by conceptualizing AC from a relative view, this study discloses the unique roles of knowledge from different supply chain partners in realizing the benefits of R&D investment in innovation. Second, the exploration of the contingent roles of dysfunctional competition in the emerging economy of China enriches insights on the roles of institutional environment on knowledge absorption and the knowledge on relative AC in emerging economies.

How can digital collaboration capability boost service innovation? Evidence from the information technology industry

Digital collaboration capability, which refers to a company's ability to share and coordinate information with partners via digital channels, is one of the primary organizational capabilities that helps companies gain differentiation advantages. However, there is still no consensus on how companies should leverage digital collaboration capability to improve their services. To fill this gap, we develop a moderated mediation model from the perspective of absorptive capacity. Through the survey of 205 Chinese information technology (IT) companies, we find that potential absorptive capacity and realized absorptive capacity fully mediate the positive relationship between digital collaboration capability and service innovation, suggesting that digital collaboration capability can improve a company's services only when it is translated into absorptive capability. More interestingly, technological turbulence strengthens the mediation effect of absorptive capacity, implying that a high-level technical environment better facilitates companies to absorb information and knowledge from different digital channels and subsequently improves service innovation. We contribute to the existing digital innovation literature by articulating the moderated mediation mechanisms through which digital collaboration capability influences service innovation. Our study also provides managerial implications for companies on how to boost service innovation in the digital era.