Realized Absorptive Capacity Research Articles

The impact of potential and realized absorptive capacity on open innovation: the moderating role of knowledge-oriented leadership

PurposeThis study aims to analyze the effects of the components of absorptive capacity (ACAP) – potential absorptive capacity (PACAP) and realized absorptive capacity (RACAP) on inbound and outbound open innovation (OI). In addition, this study investigates the moderating role that knowledge-oriented leadership (KOL) plays in the relationship between ACAP and OI.Design/methodology/approachThis research adopts a quantitative approach, using structural equation modeling, in a sample of 218 companies in the Brazilian manufacturing sector, using a random sampling technique and self-administered questionnaire.FindingsThe results indicate that while PACAP positively influences inbound and outbound OI, RACAP has a significant relationship only with outbound OI. In addition, KOL moderates the significant relationships between PACAP and RACAP and OI, indicating that the development of a leadership that fosters learning and interaction between employees and sectors of the organization impacts the innovation results of companies in the manufacturing sector.Practical implicationsThis study also shows that managers must have an active role in the construction of an organizational context that supports learning through initiatives that encourage the process of trial and error, teamwork and cooperation between employees.Originality/valueThis research advances previous studies by relating the two components of ACAP (PACAP and RACAP) with the two OI models (inbound and outbound), in addition to analyzing the moderating role that KOL plays in this relationship between ACAP and OI.

Understanding the role of organizational intellectual capital on developing absorptive capacity to strategize innovation ambidexterity

PurposeThe purpose of this paper is to empirically investigate the impact of organizational intellectual capital (IC) components on absorptive capacity (ACAP) such as potential absorptive capacity (PACAP) and realized absorptive capacity (RACAP). Furthermore, it attempts to investigate the mechanism through which PACAP and RACAP jointly influence innovation strategies (i.e.) exploitative and exploratory innovations.Design/methodology/approachThis is an explanatory research using a deductive approach. This study uses survey data from 184 manufacturing export firms analyzed through partial least squares structural equation modelling.FindingsThe results have found that the cognitive and social capital of a firm positively affects PACAP and RACAP, whereas relational capital has a significant effect on RACAP. Moreover, the study reveals that both potential and realized absorptive capacities considerably lead to the development of organizational exploitative and exploratory innovation strategies.Research limitations/implicationsThe research focused on two driving factors, i.e. IC components and ACAP dimensions, and overlooked how each component of IC and ACAP influences ambidextrous innovative strategy.Practical implicationsProviding managers with insights about the critical role of developing IC to facilitate the transfer and exchange of crucial absorptive capacity necessary for ambidextrous innovative strategy.Originality/valueThis study makes a significant contribution to the existing literature by highlighting the importance of ACAP and provides useful insights for firms in developing economies to improve their exploitative and exploratory innovation capability. This study likewise reveals the significance of the four dimensions of IC, which can facilitate bringing in knowledge from developing economies.

The Under-Developed Social Integration Mechanism as Moderating Factor of Two-Dimensional Absorptive Capacity Relationship: Systematic Literature Review

The study aims to answer how and what kind of the social integration mechanisms may influence the relationship between the two dimensions of absorptive capacity which is, potential absorptive capacity (PACAP) and realized absorptive capacity (RACAP). The social integration mechanism has been neglected from the discussion on how firm assimilate and transform external knowledge to advance their absorptive capacity. In doing so, we answer recent call for research about a more thorough systematic literature review of the absorptive capacity and social integration mechanisms and its definitions. We surveyed literatures published during the years 2010 to 2020 and only found 8 articles discussing moderating variable between PACAP and RACAP out of 277 articles on absorptive capacity. The aim of this systematic review is to evaluate what social integration mechanisms influence the relationship between PACAP and RACAP and how they help overcome barriers to knowledge sharing. The results showed social integration mechanism can be in terms of high commitment works system, knowledge ambiguity, organizational size, relational learning, and cultural balance. Therefore, more research underlines the importance of social integration mechanism should be encouraged.

Structural Capital and Firm Performance: Synergistic Effects of Realized and Potential Absorptive Capacities in Tourism Businesses

In a competitive and dynamic environment, business performance is a latent concern for managers, requiring firms to implement a set of strategies such as structural capital (SC), potential absorptive capacity (PACAP) and realized absorptive capacity (RACAP) to enhance their performance. Furthermore, our review of the literature found insufficient empirical research to support the theoretical connections between the variables in question. In this sense, the purpose of the present study is to cover this gap and to analyse the effect of SC on business performance. In addition, the mediating effect of RACAP was studied. Finally, the moderating effect of PACAP on the relationship between RACAP and business performance was analysed. Following the non-probabilistic convenience sampling method, a sample of 238 firms in the tourism sector in Peru’s World Heritage Cities was recruited. This study employs partial least squares structural equation modelling (PLS-SEM) for the statistical analysis of mediation and moderation. The results indicate that SC positively affects business performance and RACAP improves it. Likewise, PACAPs positively moderate the effect of RACAP on firm performance (FP). These results contribute to the theoretical understanding of the determinants of FP. Furthermore, it is helpful in practical managerial decision-making in the tourism sector in developing countries.

How resistance to change impairs innovation

PurposeThe study identifies the gap in the understanding of how employee resistance to change (RTC) could impact different stages of the process of innovation. To address this research gap, the paper introduces a new model, which theorizes three moderating effects of RTC on the different elements of absorptive capacity (ACAP).Design/methodology/approach This study empirically tests the proposed model, using survey data collected from healthcare organizations in the United States of America.FindingsFirst, the study reveals that RTC could damage the critical “connectedness” between potential absorptive capacity (PACAP) and realized absorptive capacity (RACAP), thus limiting the organization's ability to exploit new knowledge. Second, the findings also reveal that RTC can reduce the positive effect of acquisition (ACQ) on assimilation – the function responsible for decoding the meaning and for assimilating new valuable information incoming from the market.Research limitations/implicationsResearch limitations of this study are discussed further.Practical implicationsThe paper presents specific practical implications for managers.Social implicationstext.Originality/valueThis paper advances past research and practice by revealing two new mechanisms. When employees resist new changes initiated in the organizations, the resistance of employees will hinder the process of innovation in the following ways. (1) At the beginning of the process, employees can oppose and reject new valuable ideas incoming from the market. (2) At the stage of the implementation, such employees can engage in behavior that will weaken the organization's ability to successfully implement new process improvements that could otherwise increase organizational effectiveness.

A capacidade absortiva e a difusão da inovação em NEBTs e startups: Um estudo no Distrito Federal brasileiro

Purpose: To verify the contribution of the Absorptive Capacity (ACAP) to the diffusion of innovation in New Technology-Based Firms (NTBFs) and startups in the Brazilian Federal District. Method: In-depth interviews study with 20 innovative firms, 12 (twelve) startups and 8 (eight) NTBFs. The results are discussed in two items of analysis: Analysis of the profile of the firms and the Analysis of the Descending Hierarchical Classification (DHC) and of the content, in a comparative perspective around 14 thematic categories. Findings: The development factors associated with the Potential of Absorptive Capacity (PACAP) were observed as the antecedents of the diffusion of innovation. On the other hand, factors related to the Realized Absorptive Capacity (RACAP) are involved directly in the diffusion of innovation, with emphasis on the ability to generate innovation results through channels of market introduction, adoption of new technologies and financial investments. Theoretical/methodological contributions: The study contributes to the theoretical field, still lacking in production, especially regionally, on the relationship between the constructs investigated in the context of innovative firms. Supporting programs, can gain insights to improve the advanced support that facilitates access to knowledge to be adopted and conversion into innovation. Relevance/originality: The research extends the understanding of the relationship between ACAP and the diffusion of innovation, involving the absorption of knowledge and the dynamics of these constructs through the integration of critical factors in specific contexts still little investigated, such as in NTBFs and startups involving regional innovation ecosystems. Management/Social Contributions: The empirical investigation and factors addressed provide managerial implications for the practices of these firms when developing innovations, as well as for planning, developing or strengthening innovation programs and policies.

How absorptive capacity influences project performance

PurposeThe absorptive capacity (AC) leads to firm performance and influences the development and evolution of capabilities and routines, but the influence of AC in projects remains unclear. Therefore, this study aims to investigate the effect of AC on project performance (PP) in the construction industry of Sao Paulo State, Brazil.Design/methodology/approachThe authors conducted a survey questionnaire with project managers and collected 157 responses in the construction sector. They also used confirmatory factor analysis (CFA) and multiple linear regression techniques to assess the data.FindingsThe study provides empirical evidence that realized absorptive capacity (RAC) has a direct and indirect positive effect on PP. Conversely, the potential absorptive capacity (PAC) only indirectly impacts PP through project management practices (PMPs). PAC and RAC positively influence PMPs that in turn positively influence PP. The findings reinforce the relevance of AC to the development of internal knowledge for processes and routines, thereby enhancing PP.Practical implicationsThe findings provide practical implications: the AC influences PP by refining and adapting routines. Moreover, the consistent application of accepted practices is not enough for PP, but the ability to adapt, adjust and transform the relevant knowledge into routines.Originality/valueThis paper provides empirical evidence that the knowledge application of PMPs improves organizational performance through PP. However, despite what the literature has discussed, this paper proved that AC has no effect as a moderating factor between PMPs and performance; however, AC's role significantly impacts PP through PMPs.

How potential and realized absorptive capacity increased ability to innovate: the moderating role of structural ambidexterity

Purpose Digital start-ups have limited resources. With the demands of rapid growth, digital start-ups need to rely on their ability to explore external knowledge and exploit it into swift innovation. Developing absorptive capacity is an alternative to overcome this difficulty. This study aims to demonstrate how the potential and realized an increase in absorptive capacity enables organizations to innovate moderated by structural ambidexterity. Empirical evidence places more emphasis on the impact of absorptive capacity on innovation but still leaves the “black-box” question of innovation and how potential absorptive capacity (PACAP) can achieve realized absorptive capacity (RACAP). Design/methodology/approach This study tests, with a structural equation model, samples collected from 143 digital start-ups in Indonesia. Findings The finding of this study suggests that PACAP influences the ability to innovate only if RACAP mediates it and structural ambidexterity positively moderates the relationship between these two variables. Research limitations/implications First, this study uses digital start-up organizations as respondents. Second, this study explores the role of the structural ambidexterity that moderates the relationship between PACAP and RACAP manifested in digital start-ups organizations that are identical to temporary companies with limited resources. Third, digital start-ups have a fast-growth life cycle, unlike regular companies. Finally, the validated scale is based on data collected entirely from digital start-ups located in Indonesia, which may limit the generalizability of the findings to other industry contexts. Practical implications Start-ups suffer from the ability to innovate that increases their propensity to fail. They overcome this failure by increasing the absorptive capacity of the founding team to improve their ability to innovate. Because of limited resources available at digital start-ups, the flexibility of their management style can overcome these barriers, allowing the pursuit of both knowledge exploration and exploitation in a balanced way. Originality/value Most of the studies explained that the ability to innovate comes from absorptive capacity. In fact, they do not explore PACAP and RACAP and their relationships. Moreover, the studies also indicated that the contextual ambidexterity moderated PACAP and RACAP. Meanwhile, digital start-ups in this study revealed that structural ambidexterity with two dimensions, i.e. shared value, and behavioral integration, enables and positively moderates the relationship between PACAP and RACAP.

Absorptive Capacity and Its Dual Effect on Technological Innovation: A Structural Equations Model Approach

Knowledge absorptive capacity (ACAP) is a key dynamic capability that boosts business innovation, particularly in developing economies. However, scarce studies focus on ACAP and technological innovation (TI) in the context of small- and medium-sized enterprises (SMEs). Therefore, this study aims to examine the effects of two different types of knowledge absorptive capacities to generate TI in the context of the Mexican manufacturing industry and determine whether realized absorptive capacity (RACAP) mediates the relationship between potential absorptive capacity (PACAP) and TI. This analysis was carried out through an empirical study of predictive type and quantitative approach. A survey-type questionnaire was randomly applied to a sample of 249 SMEs. The survey confers 200 managers’ opinions on the manufacturing industry in Mexico. The outcomes obtained through the variance-based structural equations (PLS-SEM) approach revealed that PACAP significantly influences RACAP, whereas, RACAP does impact TI and has a full mediating effect on the relationship between PACAP and TI. Nevertheless, although the significant direct effect of PACAP on TI is not verified, this research demonstrated the significant indirect effect of PACAP on TI. The findings reveal important implications for managers and decision-makers who must direct their strategies and ensure that the external knowledge acquired is assimilated by their employees so that PACAP will result in the transformation and exploitation of the internal and external knowledge acquired (RACAP), converting it into new products and processes.

The impact of the institutional environment of the host country on the perception of compliance risk of the international engineering contractor: the moderating effect of absorptive capacity

PurposeWhile there is a general belief that a defective institutional environment will lead to higher compliance risk, the current state of knowledge about how the institutional environment affects enterprises' compliance is equivocal. This study aims to explore how does the host country's institutional environment affect the compliance risk perception of international engineering contractors and how to mitigate this impact.Design/methodology/approachThis study empirically tests the impact of the institutional environment from the two dimensions of the institutional environment: legal completeness reflects whether the formal regulations are clear, detailed and comprehensive and legal effectiveness reflects whether rules and policies can be implemented effectively when the proper legal codes are provided. Based on 213 questionnaire data, this study uses partial least squares structural equation model (PLS-SEM) and Smart PLS software to test the hypothesis.FindingsThis study finds a negative relationship between the host country's legal completeness (LC) or legal effectiveness (LE) and a contractor's compliance risk perception. Further, the results show potential absorptive capacity (PAC) and realized absorptive capacity (RAC) of a contractor are critical for mitigating the impact of low LC in the host country, but not when LE is low.Practical implicationsThe findings will be useful for international engineering contractors to respond to the compliance risk of the host country, both in choices of overseas investment locations and compliance capacity building.Originality/valueThis study reveals the impact of the host country's institutional environment on the compliance risk perception of international contractors, and provides theoretical guidance for how to alleviate the compliance barriers brought by the host country's institutional environment to international engineering contractors.

The mediating role of absorptive capacity on innovation among technology business incubators in the Philippines

PurposeThe paper aims to explore the knowledge management and innovative outputs (IO) of university-based technology business incubators funded by the Department of Science and Technology in the Philippines.Design/methodology/approachThe respondents, which include heads, managers, coordinators, and staff,were reached out via email using a database. The instrument was generally adopted from various related studies in the literature. Data were analyzed quantitively using partial least squares – structural equations modeling.FindingsThe main findings reveal that the mediated relationship between potential absorptive capacity (PACAP), realized absorptive capacity (RACAP) and IO explained 38.7% of the variance both predicted by PACAP and mainly explained by RACAP. Among new organizational antecedents measured, slack resources and willingness to cannibalize did not predict PACAP, while tolerance for failure and external openness predicted PACAP. Consequently, PACAP and RACAP positively mediated the relationship between significant organizational antecedents and IO.Originality/valueThe validation of the positive and significant link of absorptive capacity (ACAP) and innovation with an emphasis on the Philippine context. The study pointed out the unidimensionality of PACAP and RACAP as a single ACAP variable and not two separate constructs.

Absorptive capacity and organizational performance in an emerging market context: Evidence from the banking industry in Turkey

Adopting the knowledge-based view (KBV), this study investigates how and when firms in emerging economies are able to generate greater performance from the absorptive capacity (AC). We distinguish between two core components of AC - potential absorptive capacity (PAC) and realized absorptive capacity (RAC) - and examine their independent as well as the joint effect on organizational performance. Then, we examine the moderating effects of environmental dynamism and branch network- as key boundary conditions. With data from 205 bank managers in Turkey, we show that the complementary effect of PAC and RAC on organizational performance is greater than the separate effect of each component. Moreover, the findings indicate that the combined effect becomes stronger when firms are part of an extensive branch network and function in a low level of environmental dynamism. We extend the KBV by demonstrating that innovation and knowledge resource development in emerging markets requires a collective effort and complementary learning processes to yield high results. Finally, we scrutinize the conditions under which firms in emerging markets can complement their learning processes efficiently to achieve greater performance.

A Multidimensional Study of Absorptive Capacity and Innovation Capacity and Their Impact on Business Performance.

The aim of this paper is to understand how absorptive capacity and innovativeness influence business performance. Most previous studies have not considered the different dimensions of absorptive capacity and innovativeness. As a consequence, they have not analyzed the relationships between these dimensions, such as potential and realized absorptive capacity (RACAP) and product and process innovation. In our study, we analyzed the relationships between each of these dimensions and their effect on organizational performance. To achieve this, in addition to the theoretical foundation provided by the working hypotheses, a questionnaire was sent to 800 CEOs of Spanish companies in different sectors, obtaining a response rate of 38.25%. Structural equation modeling was applied to test the hypotheses. This study confirms the positive effect of absorptive capacity on innovation capacity, which in turn has a positive effect on business performance. Moreover, different dimensions of absorptive capacity and innovativeness play an important role in these relationships. This study contributes to a better understanding of how potential and RACAP influence the innovativeness of firms, both in their ability to innovate products and to improve business processes. In addition, it explores how these different innovations impact business performance and provide firms with knowledge on how to invest resources to increase profits. Future research should further study the inner workings of each of the dimensions analyzed to determine the importance of each dimension for business performance.

A context‐driven approach on coping with COVID‐19: From hiding knowledge toward citizen engagement

The current study sets out to investigate the relationships among three interconnected dimensions, that is hiding knowledge by the Government, the realized absorptive capacity (RACAP) and citizen engagement, giving way to a context‐driven approach. Emphasis is laid on the effects engendered by the lack of official information transparency in the critical context of COVID‐19 outbreak at the global level, through the lens of the Spanish example. The relationships among the variables are analyzed by means of an empirical study conducted with 151 Spanish subjects with a view to identify whether the impact of knowledge hiding by the Government on citizen engagement can be mitigated and to acknowledge how the presence of RACAP impacts citizens in limiting the spread of COVID‐19 information disorders.

Intra-Organizational Social Capital and Product Innovation: The Mediating Role of Realized Absorptive Capacity.

This paper examines the influence on product innovation of factors based on a company’s transformation and exploitation of knowledge gathered from its intra-organizational relationships. Specifically, this paper analyses the influence of intra-organizational social capital (SC) (i.e., comprised of structural, relational, and cognitive dimensions) on realized absorptive capacity (RACAP). Moreover, it analyses the mediating role of RACAP on the relationship between internal SC and product innovation. Based on a sample of companies from the Spanish biotechnological and pharmaceutical industries, two hypotheses were tested using a structural equations model and the partial least squares (PLS) technique. The results support both hypotheses, suggesting that the development of strong and tightly knit links based on a common understanding and trust among company members lead the firm to develop dynamic capabilities for transforming and exploiting knowledge acquired externally, which fosters innovation based on new product development. Research limitations, implications and future research are also discussed by the authors of the paper.

Lean, Six Sigma and its influence on potential and realized absorptive capacity

PurposeThe purpose of this paper is to explore how Lean and Six Sigma’s distinctive practices relate to potential absorptive capacity (PACAP) and realized absorptive capacity (RACAP). The paper seeks to understand which of the practices in Lean Six Sigma are needed to manage absorptive capacity systematically.Design/methodology/approachPartial least square based structural equation modeling (PLS-SEM) was used to test the theoretical model drawing on a sample of 125 manufacturing organizations in Malaysia. In addition to examining direct effects, the study also examines indirect effects using bootstrapping method to identify possible mediation effects proposed in the model.FindingsThe results explain that Lean’s social practices (LSP), Six Sigma’s roles structure (RS) and structured improvement procedure (SIP) positively influence potential absorptive capacity (PACAP). Meanwhile LSP, RS and focus on metrics (FOM) positively influence realized absorptive capacity (RACAP). SIP was found to influence RACAP through PACAP. The analysis reveals the combination of Lean Six Sigma practices that are required in managing PACAP and RACAP differentially.Research limitations/implicationsThe study is only confined to manufacturing industries in Peninsular Malaysia. Data collected were cross-sectional in nature. The application of Lean Six Sigma and how it influences absorptive capacity may get sturdier across time, and this may change the effect toward sustainability of firm’s competitive advantage. A longitudinal study may be useful in that context. The study also makes specific recommendations for future research.Practical implicationsThe results of this study can be used by Lean Six Sigma practitioners to prioritize the implementation of Lean Six Sigma practices to develop absorptive capacity of the organization through PACAP and RACAP, which needs to be managed differentially as they exert differential outcomes. This would enable organizations to tactfully navigate and balance between PACAP and RACAP in accordance to business strategies and market conditions.Originality/valueAbsorptive capacity in Lean and Six Sigma context has largely been studied as a unidimensional construct or used as a grounding theoretical support. Therefore, understanding the multidimensionality through PACAP and RACAP provide insights on how to enhance and maneuver absorptive capacity through Lean Six Sigma systematically. The findings may pave the way for future research in enhancing the current knowledge threshold in Lean Six Sigma.

MANAGERS’ INFLUENCE ON COMPANY CAPABILITIES

ABSTRACT Purpose: This study aims to verify the moderating role of managers’ characteristics, age, and tenure (time in the sector, position, company), in the relation between the realized absorptive capacity (RACAP) and the architectural marketing capabilities (CAM). Originality/value: The present study considers the human element as a factor that affects the relations between the capacities of the company. It contributes theoretically to help understand what can impact the formulation and implementation of marketing strategies and theoretically strengthen the role of the human element. As a practical contribution, it has been shown that it is not enough to seek external knowledge, it is necessary that it is transformed and then used effectively in the design and implementation of marketing strategies. Design/method/approach: Quantitative research, with transverse temporal data collection. This study empirically tested the hypotheses based on a sample of 343 marketing managers from Brazilian manufacturing industries. Data were collected through a survey. Data were processed by means of modeling of structural equations in AMOS software. Findings: The characteristics of managers (age and tenure) moderate the relationship between a part of RACAP (knowledge transformation) and CAM (architectural marketing capability). More experienced managers should be valued because it has been proven that in this sector, they make a difference when it comes to transforming knowledge and using it in their strategies.

From Principals' Inspirational Vision Content and Potential Absorptive Capacity to Realized Absorptive Capacity: Predicting Teacher Absenteeism

This paper builds upon the theoretical framework developed by Zahra and George (2002) to empirically explore, first,the moderator effect of principals' inspirational vision content as a social mechanism that reduces the gap betweenpotential absorptive capacity (PACAP; the ability to acquire and assimilate external knowledge) and realizedabsorptive capacity (RACAP; the ability to transform and exploit this external knowledge to school processes); andsecond, the relationship between RACAP and long-term school outcomes (teachers' absenteeism 1 year later). Basedon a sample of 600 teachers from 100 elementary schools in Israel, results showed that the relationship betweenPACAP and RACAP is not conditioned by principals' inspirational vision content. The latter and PACAP predictedRACAP separately. Further, RACAP was negatively correlated with teacher absenteeism. This study provides adeeper understanding of the ACAP model in the school context and opens new avenues to exploring the socialintegration mechanism between PACAP and RACAP. It also adds a new construct to predict teacher absenteeismover the long term.

Influence of Technological Assets on Organizational Performance through Absorptive Capacity, Organizational Innovation and Internal Labour Flexibility

Organizational innovation is increasingly mandatory for firms to overcome their competitors. Organizational innovation is especially relevant in today’s dynamic and turbulent environments, where other internal variables—such as technological assets, employee training, coordination of new management capabilities, and new flexible human resources and more adaptable organizational designs—must be encouraged to create value and competitive advantage. The purpose of our research is to analyse whether technological assets influence absorptive capacity (potential and realized absorptive capacity) and how absorptive capacity influences internal labour flexibility, organizational innovation and performance. We achieve these goals by analysing the interrelations among internal labour flexibility, organizational innovation and performance, using the theory of resources and capabilities. A quantitative study was carried out with data gathered by personal interview using a structured questionnaire. Relationships proposed in the theoretical model were estimated through a structural equation model, using a sample of 160 European technology companies. The results show that support for technology and improvement of technological skills and technological distinctive competencies promote improvement in organizational performance through their positive influence on the processes of potential and realized absorption capacity. Potential absorptive capacity influences realized absorptive capacity, which impacts not only internal labour flexibility but also organizational innovation and organizational performance. Further, internal labour flexibility influences organizational performance through organizational innovation. This issue is of particular interest when considering the dynamic nature of turbulent technological environments in which the organization operates. Technological assets thus identify new sources of flexibility and organizational innovation based on deeper contextual knowledge and tools that aid knowledge capacity in the company.

The antecedents and innovation outcomes of firms’ absorptive capacity in global buyer–supplier relationships

This article seeks to address two fundamental questions: (1) Does social capital (SC) embedded in global buyer–supplier (GBS) relationships enhance local firms’ potential absorptive capacity (PAC) and realized absorptive capacity (RAC)? And (2) What are the effects of local firms’ PAC and RAC on their innovation outcomes? Based on survey data collected from 297 Chinese firms engaged in GBS cooperation in China’s Yangtze River Delta region, we test our research hypotheses with the structural equation modelling approach. The empirical findings indicate that both structural and relational SC are important antecedents of PAC and RAC in global buyer–supplier relationships. More specifically, RAC not only improves local suppliers’ new product performance, but also fully mediates the relationship between PAC and new product performance. Our results have two major implications for practicing managers. First, local suppliers in emerging economies need to pay more attention to SC embedded in GBS relationships for it is an important means for them to overcome resource constraints and therefore to improve their new product performance. Second, it is important for managers in local firms to continuously improve their PAC to better assess and assimilate external knowledge, and extend their RAC to upgrade their interpretation and comprehension of commercialization possibilities, which allows for generating synergy of knowledge recombination with existing core competencies.