Absorptive capacity is one of the most influential concepts in the management and innovation 8 literature. First introduced by Cohen and Levinthal (1989), it is typically defined as a set of 9 organisational routines and processes that allow firms to assimilate, transform and exploit 10 external knowledge. An aspect that has been ignored by the literature on absorptive capacity is 11 the nature of the knowledge being absorbed. This paper suggests that the learning strategies 12 underpinning absorptive capacity adapt to the type of external knowledge they are more likely to 13 get exposure to and as a result, not all the firms appear to benefit from the same type of external 14 knowledge for the same level of absorptive capacity. To this purpose, we explore how firm-level 15 absorptive capacity mediates the relationship between rent and pure R&D spillovers on the one 16 hand and firm-level turnover on the other in three economic areas (Europe, Japan and US). The 17 empirical analysis uses a dataset (sourced from the EU R&D investment scoreboards) made of 18 879 worldwide R&D-intensive manufacturing firms. Given the panel data structure of the 19 sample, econometric techniques that deal with unobserved heterogeneity as well as weak 20 exogeneity are employed. The empirical results suggest for the same level of absorptive capacity, 21 firms in economic areas that are closer to the world technology frontier tend to benefit more 22 from pure (knowledge) spillovers than from rent spillovers. Vice versa, firms located in areas that 23 are not on the technology frontier appear to benefit mostly from rent spillovers that travel along 24 the supply chain. These results suggest that absorptive capacity changes with the type of 25 knowledge they may get exposed to.

The purpose of this paper is to analyze the role of the knowledge diffusion process in employment effects of sustainable development investments for large international firms. We present an empirical analysis based upon a dataset composed of worldwide Research and Development (R&D) -intensive firms over the period 2002–2010. In order to identify the technological relatedness measure between the firms, we use the friendly environmental patents’ distribution. The drivers of labor innovation effects are identified as a complex combination of job displacement and compensation forces of innovation. Two research questions are investigated: first, we wonder whether green economy investments stimulate firm-level jobs within three different environmental contexts: water, waste and energy; second, we would like to learn the extent to which the knowledge diffusion is an important channel supporting labor in the environmental context, by analysing the impact of intra-industry externalities. From the empirical results, we can observe that environmental spillovers have a negative impact, by confirming the prevalence of the displacement effect. This finding is extremely important for policy implications. Indeed, not only economic incentives to allow the transition to cleaner technologies are required, but also stronger actions to favor job creation relative to environmental activities are needed for a full sustainable achievement of firms.

PurposeWith the growing demand for ethical standards in the prevailing business environment, ethical leadership has been under increasingly more focus. Based on the social exchange theory and social learning theory, this study scrutinized the impact of ethical leadership on the presentation of ethical conduct by employees through the ethical climate. Notably, this study scrutinised the moderating function of the person-organisation fit (P-O fit) in relation of ethical climate and the ethical conduct of employees.Design/methodology/approachTo evaluate the research hypotheses, two-wave data were collected from 295 individuals who are currently employed in various Iraqi organizations (i.e. manufacturing, medical and insurance industries).FindingsIn line with the hypotheses, the outcomes from a sample of 295 workers working in different Iraqi entities exhibited a positive relation between the ethical behaviour of leaders and the ethical conduct of employees in the ethical climate. Moreover, it was observed that the P-O fit of employees moderated the relationship between ethical climate and the ethical conduct of employees such that the relationship was more robust for those with a high P-O fit in comparison to those with a low P-O fit.Research limitations/implicationsThe primary limitation of this study is in the data, which was obtained from a single source. Although the study conducted two surveys and utilised a mediation and moderation variables model that was less likely to be influenced by common method bias (CMB) (Podsakoff et al., 2012), one cannot completely rule out CMB. Apart from the potential effects of the CMB, the consistency of the empirical findings could have also been compromised since self-reported data were utilised in measuring ethical behaviour, which can be a very complex and sensitive issue. For this reason, the social desirability response bias cannot be ruled out completely. When possible, future studies must gather data from multiple sources. Furthermore, supervisors must evaluate the ethical behaviour of employees. Another limitation was that the findings of this study were based on a sample in a Middle Eastern cultural context such as in Iraq. Perhaps, the particular cultural features of this context, which encompassed, among other things, a strong adherence to religious values (Moaddel, 2010), could have influenced the findings of this study. It is true that the effects of differences (P–O fit) are highly likely to replicate across cultural contexts (Triandis et al., 1988). However, it can be seen that further studies are needed to evaluate the context-sensitivity of these findings (Whetten, 2009) by analysing other cultures, where the importance of religiosity is on the decline (i.e. in Western countries, Ribberink et al., 2018) or where the cultural features are very much different from those that apply to Iraq. Lastly, other external factors were not taken into account by this study as it tried to explain ethical behaviour. Ethics is a highly complex subject and is influenced by numerous variables at the organisational, individual and external environment levels. Thus, caution must be observed when making inferences from the present study which, to a certain degree, offered a simplified version of ethical behaviour by concentrating on a few variables such as the Arab culture's traditional ideology, which dominates even science (Abu Khalil, 1992). In addition, there are the political conflicts in the Middle Eastern cultural context such as what is happening in Iraq (Harff, 2018). Thus, it is important to include such aspects in future researches.Practical implicationsIn terms of management, the findings send a clear signal to those in the upper echelon that, without ignoring the issue of ethics in organizations, employees are a critical aspect to be taken into account to encourage ethical behaviour at the workplace. This study has important practical implications. First, this study determined that ethical leadership (here, of the supervisors) positively influences the behaviour of subordinates (refers to the supervisors here); this in turn further improves the ethical behaviour of employees. It is vital that managers or supervisors are motivated to practice ethical leadership because they directly influence the employees. It has been suggested that top managers, especially chief executive officers, have the ability to shape the ethical climate, which also influences the ethical behaviour of employees further. This study offered several feasible ways that managers can apply to achieve that. In particular, top managers may utilise the ethical climate as a way of communicating the ethical values that they have to their subordinates, thereby serving as a motivation for the subordinates to adopt an ethical behaviour. It was also suggested by this study that ethical climate and the P–O fit may, to some degree, substitute each other as they influence the ethical behaviour of employees. Therefore, firms that were identified to have a low level of ethical standards, practices, and policies, at least from the employees' perspective, are better poised to conduct ethical issues in order to construct the ethical behaviour of their subordinates. More importantly, it is highly essential that the value congruence between an organization and its followers be considered.Social implicationsThis study highlighted the notion of ethics and how it’s essential for society. Ethics refer to the norms, standards, and values that direct the behavior of an individual. Ethical behaviour is vital in society because we need to be treated with respect as human beings.Originality/valueThis study responds to recent calls for more research to identify factors which may strengthen or mitigate the influence ethical behavior in the workplace such as ethical leadership, ethical climate and Person–Organization.

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