Demystifying the role of absorptive capacity in achieving innovation-based performance: model development and empirical validation

Abstract

PurposeThe purpose of this study is to explicate the relationship between knowledge-based dynamic capacities (KBDC) and innovation-based performance (INPF) in information technology (IT) firms in India by examining the mediating impact of absorptive capacity (ABCP). The paper aims to determine whether and how the ABCP of the firms is recognized as the essential facilitator of INPF.Design/methodology/approachA survey of 511 respondents from Indian IT employees at the upper and middle management levels was undertaken. In this study, the partial least squares (PLS) technique explored the causal links between constructs with the use of the software application SMART-PLS 3.0.FindingsThe outcomes of this study proved the existence of a statistically significant relationship between the ABCP and INPF of information technology firms. Furthermore, ABCP's influence as a mediator between KBDC and INPF is significant. Therefore, findings imply that ABCP mediates the relationship between KBDC and INPF, however, only to some extent.Research limitations/implicationsWith the dynamism of the global market, the research has made significant gains in illustrating the criticality of ABCP for strengthening its KBDC in a much-needed Indian context. Therefore, following the recommendations and findings of this study, practitioners should concentrate on strengthening both ABCP and KBDCs to improve their INPF. To do this, managers must proactively organize their resources, procedures, and structure to promote knowledge absorption and dissemination, fostering innovation.Originality/valueIt is a ground-breaking study that proposes that the ABCP plays a crucial role in enhancing the INPF of the firms. The software industry will likely benefit from this study by understanding ABCP's potential impact on its INPF and designing knowledge management methods accordingly.

O Papel Mediador Da Capacidade Absortiva Entre Fontes Externas De Conhecimento E Desempenho Em Inovação

“…Fulgence et al (2023) contend that absorptive capacity enables companies to effectively utilize acquired external knowledge, which is vital for spurring innovation, particularly in industrial clusters where network collaboration and access to shared resources are crucial for success. Bindra et al (2023) argue that absorptive capacity propels innovation performance by empowering organizations to not just recognize the value of new external information but also to assimilate and apply it effectively. This process involves sequential stages of learning: identifying and understanding new information (exploratory learning), spreading and assimilating this information within the company (transformational learning), and finally, using the internalized external knowledge to generate new insights (exploitative learning).…”