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

Abstract

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.

Bibliometric and content analyses of research on technology use in real estate facilities management

“…Absorptive capacity refers to a firm’s capability to recognise the value of innovation, which influences its propensity to adopt innovative technologies in its products and processes (Sancho-Zamora et al , 2021). Organisations increasingly recognised the need for computerised support during the COVID-19 pandemic.…”

“…Operational knowledge is crucial during the planning and installation of the technologies and management should be involved. In Sancho-Zamora et al (2021) view, assimilating external knowledge from outside the organisation also helps to improve routines and procedures for analysing, processing, interpreting and understanding information (Sancho-Zamora et al , 2021).…”

Mediating effect of absorptive capacity on the relationship between knowledge sharing and entrepreneurial orientation and the moderating role of opportunity recognition

“…Following Israel’s (2003) recommendation to avoid missing and incomplete surveys, 40% was added to the total sample size, generating a final sample size of 518 = 370+ (370 × 40%). Researchers adopted the G*Power technique to determine the minimum sample size (Ramayah et al , 2020; Sancho-Zamora et al , 2021a, 2021b) while using sampling table to define the maximum sample size (Makhloufi et al , 2023a, 2023b, 2023c). For a better and more accurate prediction level, the sample size should be above 100 responses, which is a good fit (Pacheco et al , 2018); this study’s maximum sample size is 518, with a total of 246 respondents.…”

“…Others (Bagheri, 2017; Ploum et al , 2018) believed that entrepreneurs' self-made strategies succeed in the OR. Sancho-Zamora et al (2021a, 2021b) found that entrepreneurs’ proactive behaviour increases the impact of AC on firm performance. Thus, an entrepreneur who recognises opportunities should act proactively to convert them to commercialised ends.…”

Effects of Social Capital and Knowledge on Small US Firm New Product Development Innovations

“…Several studies have examined the impact of absorptive capacity's impact on the KBV of the firm (Lane and Lubatkin, 1998;Limaj and Bernroider, 2017), knowledge acquisition (Li et al, 2017;Norman, 2004;Yli-Renko et al, 2001), and identifying new knowledge or market intelligence to achieve innovation (Ali et al, 2016;Cohen and Levinthal, 1990), or a competitive advantage (Cousins, 2018). Work by Sancho-Zamora et al (2021), in small and medium sized Spanish companies, affirmed that firms with higher levels of absorptive capacity made stronger use of information gathered from outside sources that in turn improved their innovation results. A firm's absorptive capacity directs the strength and type of knowledge flows involving the organization's routines and processes for acquiring, adapting, and using knowledge to advance the organization's know-how (Malhotra et al, 2005).…”