Knowledge Absorptive Capacity Research Articles

How and when CEO servant leaders fuel firm innovation: the role of social capital and knowledge absorptive capacity

AbstractFirm innovation is a characteristic of firms with a robust entrepreneurial orientation that wish to have a strong competitive position in their sector. Drawing on the theories of servant leadership and upper echelons, this study aims to highlight the mechanisms through which CEO servant leadership enhances firm innovation. This paper examines (1) knowledge absorptive capacity as a mediator in the CEO servant leadership–firm innovation relationship, and (2) the moderating role of social capital (internal and external) in this relationship. Original data from 176 large and medium-sized hotels in the Canary and Balearic Islands (Spain) were used to test the hypotheses, and a partial least squares (PLS) analysis using Smart PLS 4 revealed that CEO servant leadership was positive for firm innovation, which was, in turn, mediated by firm knowledge absorptive capacity. Furthermore, the relationship between CEO servant leadership and firm knowledge absorptive capacity was found to grow stronger as internal social capital increased, while external social capital strengthened the positive link between firm knowledge absorptive capacity and firm innovation. New light is therefore shed on how and when CEO servant leadership is most effective in fostering firm innovation. Additionally, our firm-level findings contribute to the servant leadership literature, which is dominated by individual and group-level research, and expand the mounting evidence for the positive impact of CEO servant leadership on firm-level outcomes.

How relative technological size affects innovation performance of cross-border technology M&A enterprises: a configuration perspective

ABSTRACT Cross-border technology mergers and acquisitions (M&As) are critical strategic decisions for emerging multinational enterprises (EMNEs) seeking to gain competitive advantage. While previous research has examined the net effect of relative technological size on the innovation performance of EMNEs, their theoretical hypotheses and empirical results have been inconsistent. These studies fall short in explaining how relative technological size enhances innovation performance under conditions of acquirer knowledge absorptive capacity (comprising knowledge base and R&D investment) and macro-institutional contexts (comprising host country institutional quality and diplomatic relations). Utilising a sample of 44 listed firms in mainland China from 2008 to 2018, and employing the fuzzy-set qualitative comparative analysis (fsQCA) approach, our research reveals the relationship between different configurations of these influencing factors and the innovation performance of EMNEs. Our findings suggest that the mechanism by which relative technological size affects innovation performance is contingent upon the conditions of knowledge absorptive capacity and macro-institutional contexts.

Innovation’s Performance: A Transnational Analysis Based on the Global Innovation Index

The pandemic marked the beginning of a succession of events on a global scale (not the least of which is a greater concern for the environment and for quality of life/distance work) with a major impact on the economy. Innovation plays a key role in meeting the challenges of the future, but despite investment in innovation, global economic growth has fallen short of the expected performance. The aim of this study is to identify the factors with the greatest impact on the performance of innovation ecosystems based on the performance of the innovation ecosystems of 64 countries assessed by the Global Innovation Index 2022. The methodology consists of multiple hierarchical linear regressions, in which the impact factors on innovation ecosystems, measured through indicators, are the independent variables and innovation performance, in knowledge and technology and in creativity, are the dependent variables in an iterative process, using STATA/MP 18.0 data analysis software. The results indicate that human capital and research (the basis of business and innovative products aimed at filling gaps in the market are people with a good higher education, which is also linked to local university rankings) and business sophistication (highly qualified work, leveraging strategic partnerships, and with knowledge absorption capacity) are the main pillars determining innovation performance at a global level. Education (an educated workforce is of growing importance in the knowledge era), R&D investment (including support from the state in the form of tax incentives for whoever invests in R&D), innovation partnerships (for a faster, more open innovation effort), ecological sustainability (a new reinforced priority after COVID-19) and knowledge absorption (to absorb one must first detain valuable knowledge in the area) are the variables with the greatest impact on innovation performance. The work provides guidance on which areas should be prioritized in the development of policies and strategies to accelerate innovation in countries. The study is limited by the time frame and reveals, by comparison with pre-pandemic studies, that the determinants of innovation can be dynamic, varying according to the countries and, consequently, the global context of the analysis.

Advanced manufacturing firms’ digital transformation and exploratory innovation

ABSTRACT The impact of digital transformation (DT) on exploratory innovation (EI) in advanced manufacturing firms (AMFs), particularly the influence of external knowledge search (EKS) and knowledge absorptive capacity (KAC), is a crucial research topic. Current empirical studies on the relationship between DT and EI in AMFs from a knowledge-based view (KBV) are limited. This study conducts a systematic analysis of DT’s impact on EI and its mechanisms, focusing on 254 listed firms in China and ‘Made in China 2025’ key areas. Based on KBV, it models the influence of DT on EI. The results indicate a significant positive correlation between DT and EI, with EKS, KAC, and their interactions mediating this relationship. These findings offer new insights into the KBV research pathways for DT and EI.

Business Continuity Innovation in Disruption Time: Sociotechnical Systems, Business Analytics, Virtual Business, and Mediating Role of Knowledge Absorptive Capacity

The continuity strategy of business innovation to deal with the disruption condition, it is still many to be designed and explained. Referring to a sociotechnical systems (STSs) approach, this article conceptualizes and practically examines the business analytics, virtual business, and knowledge absorptive capacity that increase and produce the continuity capability of business innovation in uncertain business environment (e.g., COVID-19). We used SmartPLS to empirically evaluate the model based on 145 companies in a developing country of Indonesia that is currently under high disruption. Drawing a technical perspective, business analytics has successfully enhanced business continuity innovation and knowledge absorptive capacity. In a socio perspective, knowledge absorptive capacity significantly produces business continuity innovation. Business continuity innovation suffers if firms adopt virtual business without increasing their knowledge capabilities. Furthermore, mediating effects present higher support from management level to knowledge absorptive capacity strategy, a bigger impact for business analytics, and virtual business to improve and increase the goals opportunities of business continuity innovation. A novel contribution is the integration of STSs (business analytics, virtual business, and knowledge absorptive capacity) that drives business continuity innovation to deal and recover from uncertain environment. Our efforts also align several fields such as information technology-business alignment strategy, knowledge management, and knowledge-business services. Future research would be worthwhile and interesting whether our framework will suitable to different companies/respondents, business context, industry area, and crisis condition.

Board Interlock Networks and Corporate Low-Carbon Innovation in China: Does Position Matter?

Through combining the resource dependence theory and social network theory, this study sheds light on how two major kinds of interlocking network positions—central network position and structural holes position—drive corporate low-carbon innovation. We consider the mediating effect of information asymmetry and knowledge absorptive capacity to reap benefits from occupying the two advantageous network positions. We have empirically investigated a sample of 3365 listed firms over the period of 2009–2018 drawn from China, the largest emerging market economy as well as the biggest carbon dioxide emitter. Our main results show that either holding a central network position or spanning a structural holes position plays a significant role in stimulating low-carbon technologies, and the promotion effect can be partially channeled through downward information asymmetry and upward knowledge absorptive capacity. Our findings differ from earlier work because of our emphasis on network position, and our specific focus on corporate low-carbon innovation and China's unique setting, rather than network size, greenhouse gas emissions, and developed economies. This study also provides significant implications for executives striving to improve firms’ low-carbon innovation performance, and for policymakers seeking ways to fulfill the mission of carbon dioxide abatement.

The impacts of customer involvement and knowledge absorptive capacity on the performance of startups

ABSTRACT The objective of this research is to investigate the effect of customer involvement in different stages of the new product development process and absorptive capacity on the growth performance of startups. In this paper, the linear regression was utilised to analyse the empirical data collected from 152 startups in Vietnam. Results showed that customer involvement has a positive impact on startup growth. Particularly, startups who involve customers more intensively in the ideation stage will yield better growth than those involving customers in the development and commercialisation. The next finding is about knowledge absorptive capacity whose four processes affect startup growth differently. The analysed data revealed that only knowledge acquisition and knowledge exploitation have a significant positive impact on the performance of startups. Other processes of absorptive capacity, which are knowledge assimilation and transformation, have no contribution to performance. Based on results, some recommendations to enhance the startups’ performance are proposed.

Non-state shareholder governance and corporate innovation efficiency under the background of mixed ownership reform: evidence from China

ABSTRACTBased on data from Chinese SOEs that participated in the mixed ownership reform between 2013 and 2020, mixed OLS and fixed effects models are used to empirically test the impact of non-state-owned shareholders’ participation in board governance on the innovation effectiveness of SOEs in the mixed ownership reform. The empirical results show that: the proportion of non-state shareholder-appointed boards can significantly improve the innovation efficiency of SOEs, and the findings still hold after a series of robustness tests. The impact of the governance of non-state shareholders on the innovation efficiency of SOEs is heterogeneous in two aspects: equity incentives for managers and knowledge absorption capacity. This paper enriches the research on the governance of non-state shareholder boards under mixed ownership reform. It provides empirical evidence and policy implications for optimising the innovation efficiency of SOEs.

Why cognitive absorption is not enough: The role of knowledge absorption capacity and technological opportunity for individual learning

The purpose of this paper is to address the basic question why does high absorptive training programmes are not always beneficial for individual level learning? Thus, we seek to understand when and how cognitive absorption is beneficial for individual learning. The proposed model was tested using data obtained in a field study (N = 371) and in an experiment (N = 119). For field study, data was obtained at two points in time from three data sources (co-workers, subordinates, supervisors) working at a private commercial bank operating in Pakistan. For laboratory experiment, data was collected from the business students of a private sector university in Pakistan. The obtained data for both studies were analysed for random coefficient models with Mplus. Based on the motivation-ability-opportunity theory of behaviour, we proposed a model. It was found that cognitive absorption and highest individual learning was contingent upon the individual level knowledge absorption capacity. It was further found that training programmes with high cognitive absorption are likely to produce high levels of individual learning when the participants also have both high level of knowledge absorption capacity and technological opportunity. With this research, we inform practitioners that in these learner-focused trainings, personal characteristics of the participants and technology play vital role in determining effectiveness for high level of individual learning. The research findings will help practitioners understand what they need to add in training programmes for high level individual learning experience. Doing so will bring best value in form of higher learning to the cost of trainings.

KNOWLEDGE ABSORPTIVE CAPACITY: CONTEMPORARY TRENDS AND NEW CONCEPTUALIZATION IN THE CONTEXT OF FUNDAMENTAL TRANSITION PROJECTS

Knowledge absorptive capacity (ACAP) is a dynamic organizational capability that enables the appropriation of valuable external knowledge to generate superior performance. This article discusses the following questions: Is ACAP still worth new conceptualizations? Moreover, if this is the case, what are the opportunities for additional studies to deepen the theoretical and empirical framework of this topic? To this end, we drew on the discussion of the most influential research papers and a comparative analysis between three young colleges in preparation for the first program accreditation. The theoretical discussion and the empirical results allowed the proposal of an integrative model of the ACAP processes, antecedents, and outcomes suitable for fundamental transition projects. It highlights many issues that have been understudied or ignored in the existing literature, such as the transformative and interactive nature of ACAP, the desired ACAP processes at the interface between potential and realized absorptive capacities, the necessity of a discriminative study of the antecedents and outcomes of ACAP; the ACAP-organizational learning link; the combined effects surrounding ACAP; and the role of ACAP ecosystem, organization maturity, and project maturity. In addition, the model suggests five ACAP key performance indicators: the relevance, depth, exhaustiveness, pervasion, and sustainability of knowledge. Considering these crucial issues, along with the diverse spectrum of organizations, sectors, and countries, paves the way for more in-depth research on ACAP and helps to reduce the ambiguity that still characterizes this domain.

Innovation network, knowledge absorption ability, and technology innovation performance--An empirical analysis of China's intelligent manufacturing industry.

Based on the social network theory, this study utilizes knowledge absorption capacity as the mediating variable and technology turbulence as the moderating variable; furthermore, it focuses on China's intelligent manufacturing industry data to explore the effect of the intelligent manufacturing enterprise innovation network on technology innovation performance and the regulating mechanism of technology turbulence. Based on the patent data obtained from Derwent Database (survey period: 2016-2020), the empirical analysis indicates the following: (1) Network relationship, network location, and network density are significantly and positively correlated with technology innovation performance; however, network size exerts no significant effect on technology innovation performance. (2) Network relationship strength, network location, and network density exert significantly positive effects on the two dimensions of knowledge absorption capacity, namely the In-degree and the Out-degree. Network size exerts no significant effect on knowledge absorption capacity. (3) Knowledge absorption capacity exerts a partial mediating effect on the relationship between innovation network and technology innovation performance. (4) The three dimensions of innovation network that exert a significant effect on technology innovation performance are positively correlated with the interaction terms of technology turbulence, which indicates that the interaction terms, namely innovation network and technology turbulence, exert a positive impact on technology innovation performance through knowledge absorption capacity, and that the moderating effect of technology turbulence exerts a role through knowledge absorption capacity. Finally, this study postulates implementations and policy proposals for enhancing the innovation performance of intelligent manufacturing enterprises.

Examining intellectual capital and knowledge absorptive capacity for high innovative performance

AbstractIn the contemporaneous business environment, intangible assets and capabilities are building blocks of an organization's innovative performance. Despite the rising importance of absorptive capacity in knowledge management and innovation literature, there has been limited focus on its dimensions, such as knowledge acquisition, assimilation, and transformation, particularly in relation to intellectual capital (IC) and innovative performance. This research unravels the mediating role played by the dimensions of absorptive capacity in connecting IC to innovative performance. This research offers a novel combination of individual mediation effects of absorptive capacity components on the relationship between IC and innovative performance. Data for this cross‐sectional research were gathered from 295 organizations through a Likert scale questionnaire. This research employs partial least square‐structural equation modeling to analyze the individual mediating pathways of absorptive capacity. This study shows that knowledge acquisition adversely influences the relationship between IC and innovative performance, which challenges conventional wisdom. Conversely, all other mediation paths, including knowledge assimilation, transformation, and exploitation, exhibit a positive influence on innovative performance. Furthermore, this study also offers valuable managerial implications and suggests potential areas for future research.

The role of renewable energy alliances in enhancing corporate innovation: Evidence from China

The increasing importance of innovation-driven development requires empowering enterprises as the main drivers of innovation in emerging energy technologies. The existing literature primarily emphasizes government support for renewable innovation, with limited research on external collaborations. This paper searches and collects announcements of listed renewable energy companies regarding strategic alliances during 2009–2021 to explore whether renewable energy alliances promote innovation and their mechanism to motivate innovation efforts, using the Two-way Fixed Effects Model. The main results suggest that renewable energy alliances increase innovation output significantly. The mechanism analysis reveals that establishing renewable energy alliances indirectly enhances innovation output via transaction cost savings and alleviates financing constraints. The heterogeneity analysis indicates that factors such as firm ownership, size, knowledge absorption capacity, green investor concerns, and enterprise life cycle significantly impact the innovation incentives from renewable energy alliances. This paper enriches the research on the drivers of renewable energy innovation and provides policy insights for encouraging autonomous innovation in renewable energy enterprises.

Intellectual capital components and entrepreneurial orientation: the mediating role of absorptive capacity

Purpose The purpose of this study is to examine the impact of intellectual capital (IC) components and absorptive capacity (ACAP) on entrepreneurial orientation (EO). Furthermore, it attempts to investigate the mediating role of ACAP between intellectual components and EO.Design/methodology/approach Using a self-administered survey to sample the Jordanian pharmaceutical industry, the research measurement scale was adapted from previous studies, and data were collected from 24 pharmaceutical companies. The proposed conceptual model and associated hypotheses were tested using structural equation modeling.Findings The empirical findings indicate that relational capital (RC) and structural capital (SC) have a significant impact on EO and account for 72.2% of this aspect. However, it is somewhat unexpected to find that human capital does not have a significant direct impact on EO. ACAP positively mediates the relationships between RC and SC and EO. Finally, this study has several theoretical and practical implications with regard to the business literature and management practices.Originality/value This research bridges gaps in the literature and highlights the importance of ACAP in knowledge-based industries. The assessment and estimation of how knowledge ACAP is associated with entrepreneurship orientation has not been previously provided. From a practical perspective, the findings of this research can be used by firms in the pharmaceutical industry to enhance ACAP and better exploit their IC, leading to a more proactive and innovative entrepreneurship orientation. This, in turn, can lead to the development a new products and services. Furthermore, by examining the mediating role of ACAP between intellectual capacity components and EO in the pharmaceutical industry, the research contributes to the growing body of literature on entrepreneurship orientation in developing countries.

Building knowledge absorptive capacity in South African public companies through recruitment practices

Most state-owned companies (SOCs) in South Africa are in a perpetual struggle to recruit human resources and replenish their intangible knowledge asset losses that are largely due to high employee turnover. The study is interdisciplinary in nature, presenting a strong link between recruitment practice, employee turnover, knowledge loss and knowledge absorptive capacity. The research project used a mixed methods exploratory sequential design by gathering in-depth qualitative data through interviews with 20 human resource managers in 9 SOCs. Survey data was collected from a 25% response rate to the 585 distributed questionnaires. The survey instrument was tested for reliability with a Cronbach’s alpha at 0.94. The qualitative data extracted through the interviews were analyzed thematically using Atlas.ti software, whilst the quantitative data were analysed using Statistical Analysis Software (SAS). The findings revealed that due to increased human resources mobility, human resource management (HRM) establishments in many SOCs were in a perpetual struggle to fill vacancies in mission-critical areas. Knowledge-loss induced by human resource attrition was a serious challenge in most SOCs. On a positive note, the study revealed that recruitment practices were knowledge-driven, largely because they supported SOCs in the sourcing of the required company-specific human and knowledge resources, albeit some extant challenges. The study concluded that HRM recruitment practices build knowledge absorptive capacity in South African SOCs.

Knowledge Absorptive capacity in Fintechs: Evidence from Latin America

Fintechs use technologies to offer financial services in a different way than traditional ones. The Fintech sector has seen rapid growth in the global economy and has expanded access to financial services to a wide variety of users; consequently, it has drawn the attention of academics around the world. Being knowledge-intensive organisations, Fintechs can absorb knowledge as a key competence. Absorptive capacity – which includes practices to acquire, assimilate, transform, and apply knowledge - has been analysed in previous studies as a factor that can influence organisational performance. However, most studies have used data from developed countries. The objective of this ongoing study is to analyse the knowledge management (KM) practices used by a Latin American Fintech to absorb knowledge. For this, a case study with a qualitative approach will be presented, using data from an international company of Peruvian origin, specializing in leasing. Data was collected through interviews. The information collected was transcribed and categorized for analysis. The analysis will include content analysis and narrative analysis techniques, supported by Atlas.ti software. The results contribute to the KM literature in two ways: First, by describing how knowledge absorption occurs in Fintechs. Second, by systematizing evidence on how KM practices act in organisations in emerging contexts, to support absorption capacity, and consequently, contribute to organisational results. On the empirical side, this study provides specific insights to managers of companies in the financial and technological sectors in emerging contexts, on how and which practices implementing to improve KM in their organisations.

Can Mergers and Acquisitions Promote Technological Innovation in the New Energy Industry? An Empirical Analysis Based on China’s Lithium Battery Industry

The advancement of technological capabilities within lithium battery enterprises crucially facilitates the high-quality development of the new energy industry. This study aims to empirically investigate the impact of mergers and acquisitions (M&A) on the technological innovation capacities of these enterprises, with a specific focus on the lithium battery sector in China. Utilizing data from 34 publicly listed companies spanning the period from 2012 to 2022, we employ the multi-period double-difference method for comprehensive analysis. Researchers have observed that the implementation of merger and acquisition (M&A) strategies by new energy companies leads to an approximately 1.5 percentage point increase in their technological innovation level. However, the improvement in the green technological innovation level is not significant. After a series of robustness tests, the aforementioned conclusion remains valid. Additionally, with the enhancement of firms’ knowledge absorption capacity and regional intellectual property protection, M&A activities can further promote technological innovation in new energy companies and contribute to the enhancement of green technological innovation. Heterogeneity analysis has revealed that technological M&A crucially facilitates the improvement of technological innovation levels among listed companies in the lithium battery industry. Implementing M&A strategies not only benefits the enhancement of firms’ technological innovation levels but also significantly fosters green technological innovation. Furthermore, further research has indicated that changes in the level of green technological innovation after the implementation of M&A strategies by new energy companies facilitate the reduction of industrial wastewater and sulfur dioxide emissions. The main innovation of this study, which utilizes new energy companies as the research object, is as follows: it reveals the causal relationship and regulatory mechanism between M&A, technological innovation, and green technological innovation in new energy companies. Furthermore, the study analyzes the mechanism that promotes green technological innovation in new energy companies from the intellectual property protection perspective. Moreover, it assesses the heterogeneous impacts of changes in both technological innovation levels and green technological innovation levels on environmental governance after the implementation of M&A activities.

Driving business performance through intellectual capital, absorptive capacity, and innovation: The mediating influence of environmental compliance and innovation

This paper investigates the relationships between intellectual capital (IC), knowledge absorptive capacity (KAC), environmental compliance, innovation, and business performance in Vietnam. The study surveyed 206 management team members across various industries using a structured questionnaire and conducted data analysis using PLS-SEM. The findings reveal that IC heavily influences KAC, which in turn enhances business performance when combined with innovation. Additionally, environmental compliance and innovation partially mediate the association between KAC and business performance. The research recommends that managers should concentrate on improving KAC and innovative capabilities while ensuring environmental compliance to leverage IC and improve business performance. This study makes a significant contribution to the existing literature by extending the scope of the resource-based view and shedding light on the roles of KAC, environmental compliance, and innovative capacity in emerging markets like Vietnam.

On the alignment of competitive strategies for successful acquisitions: a two-decade longitudinal analysis

Purpose Most studies explore the success of mergers and acquisitions through ex ante analyses based on the compatibility of resources and capabilities between the acquirer and target. As more than half of them fail, there seems to be room for enhancing our understanding of when and how acquisitions can actually improve firms' competitiveness. Diverging from these conventional approaches, the authors posit that attention should be at the strategic level. The purpose of this paper, therefore, is to explore the existence of compatibility between acquirers’ and targets’ competitive strategies and its effect on post-acquisition business performance. Design/methodology/approach Through the Thomson Reuters Eikon financial and acquisition databases, the authors built a unique data panel of 174 acquirer–target matched acquisitions in the manufacturing sector from 24 different countries between 2000 and 2020. The authors used a two-step System-GMM approach to address the hypotheses proposed in this paper. This methodology allowed to isolate and easily compare the differential effects of each possible combination of strategic similarity and dissimilarity between the target and acquiring company on the latter’s post-acquisition strategies. Findings The need to unravel the motives behind successful acquisitions has gained enormous interest in recent years among academics and managers to improve – or maintain – firm competitiveness. Through a panel data of 174 acquisitions among manufacturing firms (2000–2020), this study shows that differentiated firms improve their business performance by acquiring firms with similar strategies; nevertheless, their performance worsens if the acquired firm follows a cost-leadership strategy. Concerning acquirers with a cost-leadership strategy, the lack of clear behavioral patterns suggests that the lower knowledge absorption capacity associated with these firms might be a decisive factor in being able to assimilate and efficiently exploit the acquired firm's knowledge. Originality/value Overall, this approach offers a new and valuable perspective for practitioners because it improves understanding of the possible causes of merger failure and opens new attentions to consider in maximizing success and long-term competitiveness. The results of this study bring, thus, an unexpected result to this research: the importance of the acquirer’s strategy beyond the similarity or dissimilarity of the strategies of the acquirer and the acquired company.

Does Digitalization Affects Work-Life Flexibility? A Perspective of MNCs in Malaysian Working Environment

MNCs advances in digitalization have changed the way one work and the way they live their lives. The long-term goal of this study is to better understands, organize and restructure each MNCs digitalized knowledge system parallel to their employees’ work-life flexibility. This chapter aims to investigate the impact of digitalization and knowledge absorptive capacity and employees’ work-life flexibility in MNCs industry. Previous research has primarily relied on organizational science that have explored digital innovation in specific industry and the did not treat work-life flexibility as pre-requisite in order for an employee to achieve wellbeing or performance. Besides that, this study treats digitalization as an example of external disruptive technology that influences knowledge transfer from MNCs subsidiaries to contract manufacturing in a post-Covid environment where it has changed the way instructions, methods, and ideas transferred across these organizations and its effects to employee’s work-life flexibility. Previous research fails to fully recognize the unique and distinct characteristics of digitalization and their formative and transformative effects in terms of MNCs operational logics and to achieve work-life flexibility. Therefore, this study is investigating the relationship of digitalized knowledge transfer between MNCs’ subsidiaries and contract manufacturers and employee work-life flexibility in the context of learning intent on the effectiveness and efficiency of knowledge transfer among the technical team across organizations.