Absorptive Capacity and Technological Innovation

Abstract

Technological innovation is the foundation of competitive distinctiveness that leads to superior performance.

Antecedents and outcomes of breadth and depth of absorptive capacity: An empirical study

“…The greater a firm's breadth of absorptive capacity, the greater the knowledge base of the firm, which facilitates the firm to acquire and assimilate professional and complex knowledge in related fields in a more effective and creative manner (Kogut & Zander, 1992;Nonaka, 1994). Meanwhile, as the breadth of absorptive capacity increases, it enables the firm to understand and integrate the required specialized and complex knowledge from different viewpoints (Zahra, Larraneta, & Galán, 2015), which is beneficial in transforming and exploiting the depth of knowledge. Finally, the breadth of absorptive capacity facilitates the formation of procedures and routines in acquiring, assimilating, transforming, and exploiting knowledge (Cohen & Levinthal, 1990;Zahra, Larraneta, & Galán, 2015), which is beneficial to the formation of procedures and routines in regards to the depth of absorptive capacity.…”

“…Meanwhile, as the breadth of absorptive capacity increases, it enables the firm to understand and integrate the required specialized and complex knowledge from different viewpoints (Zahra, Larraneta, & Galán, 2015), which is beneficial in transforming and exploiting the depth of knowledge. Finally, the breadth of absorptive capacity facilitates the formation of procedures and routines in acquiring, assimilating, transforming, and exploiting knowledge (Cohen & Levinthal, 1990;Zahra, Larraneta, & Galán, 2015), which is beneficial to the formation of procedures and routines in regards to the depth of absorptive capacity. We therefore hypothesize the following:…”

“…'Longitudinal absorptive capacity' is the firm's capacity to use unfamiliar or unrelated technological knowledge Vasudeva and Anand (2011) Knowledge features Breadth of absorptive capacity refers to the extent to which the knowledge contained in the firm's absorptive capacity is multifaceted and comprehensive in its coverage of a multitude of fields. Depth of absorptive capacity refers to the extent to which the firm has developed expert-type mastery of a particular technological domain Zahra, Larraneta, and Galán (2015) a firm establishes diverse interfirm ties in the course of its business activities (Koka & Prescott, 2002). Such interfirm relationships are a part of social capital for the following reasons.…”

“…First, the breadth of absorptive capacity concentrates on diverse and heterogeneous knowledge (breadth of knowledge), while depth of absorptive capacity focusses on specialized and complex knowledge (depth of knowledge) (Van Den Bosch, Van Wijk, & Volberda, 2003). Second, the breadth of absorptive capacity stresses whether a firms' absorptive capacity is narrow (covering only a few fields) or broad (covering a wide range of fields), while depth of absorptive capacity underlines whether a firms' absorptive capacity is shallow (where a firm has any level of skill in a given field) to deep (where the firm has great expertise in a given field) (Zahra, Larraneta, & Galán, 2015). The breadth and depth of absorptive capacity provides a convenient way to conceptualize the effect of absorptive capacity on innovation from the view of knowledge features (Zahra, Larraneta, & Galán, 2015).…”

“…Second, the breadth of absorptive capacity stresses whether a firms' absorptive capacity is narrow (covering only a few fields) or broad (covering a wide range of fields), while depth of absorptive capacity underlines whether a firms' absorptive capacity is shallow (where a firm has any level of skill in a given field) to deep (where the firm has great expertise in a given field) (Zahra, Larraneta, & Galán, 2015). The breadth and depth of absorptive capacity provides a convenient way to conceptualize the effect of absorptive capacity on innovation from the view of knowledge features (Zahra, Larraneta, & Galán, 2015). In the process of organizational innovation, a firm needs breadth and depth of absorptive capacity to advance the scope and efficiency of innovation -that is, the breadth of absorptive capacity benefits the scope of innovation, while the depth of absorptive capacity is conductive to the efficacy of innovation (Van Den Bosch, Van Wijk, & Volberda, 2003).…”