Determinants of Firm’s Innovation-Related External Knowledge Search Strategy: The Role of Potential Absorptive Capacity and Appropriability Regime

Abstract

Firms, especially those in the knowledge-based economy, make increasing use of external knowledge in their innovation processes. To tap into external knowledge sources, the firm follows a search strategy, which is known to be affected by both endogenous and exogenous factors. This study examines the influence of potential absorptive capacity on firms’ external knowledge search strategy. We also propose and test a moderation effect of the appropriability regime on this relationship. Based on a panel dataset of 170 international firms from various industries, we find a curvilinear relationship between the level of a firm’s potential absorptive capacity and the external knowledge search breadth. We also confirm the moderating role of the appropriability regime on this relationship. Our results highlight the role of the endogenous and exogenous factors determining the firm’s use of external knowledge in the innovation process.

Absorptive Capacity, Innovation, and External Sources of Knowledge: The Brazilian Power Sector

“…In this sense, firms with higher a Racap innovate more easily. We can conclude that the search for knowledge should take into account learning from either the market or the science (Kim et al, 2018). The literature shows that the sources of knowledge remain untested, mainly related to Racap.…”

“…In that discussion, learning by doing is not a sufficient condition for creating something new (Aribi & Dupoüet, 2015). Relevant knowledge includes not only technical tasks but also relates to how individuals meet people and discover complementary new sources of information (Kim, Lee, & Kang, 2018). The prior organizational knowledge comes from their employees, and it is the first antecedent directly associated with the development of organizational absorptive capacity.…”

“…The subsets coexist, but a higher Pacap does not mean outcomes in terms of innovation. The experience and the external knowledge sources, as well as the search for knowledge, increase Pacap (Kim et al, 2018). Yet, experience with the search for knowledge is concerned with accumulated learning related to innovation activities.…”

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

“…Absorptive capacity consists of two structural factors: a) a science-driven factor based on scientific information, and b) another market information factor, called demand-driven (Bagchi-Sen & Lawton Smith, 2014). R&D training is positively related to industrial and scientific capabilities, however, its importance differs if the capacity is demand-driven or science-driven (Kim et al, 2018). The authors also describe that knowledge exploitation practices are specific to each type of knowledge, and external sources result in different types of innovation.…”

SME Engagement with Open Innovation: Commitments and Challenges towards Collaborative Innovation

“…A strong appropriability regime increases the willingness to offer innovations to external parties and thereby increases the rate of open innovation adoption [67]. Many researchers have stressed the importance of the appropriability regime as contingency factors in influencing open innovation adoption [68]. Changes are expected in different appropriability regime environments depending on the industries [69].…”