Optimal Cognitive Distance and Absorptive Capacity

Abstract

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Industrial Innovation Collaboration in a Capital Region Context

“…According to resource-based theories, "what firms do" [94] is absorption, assimilation and transformation of knowledge from different areas [93], the results of which accumulate as knowledge assets specific to the individual firm [45,150]. This involves processes which can be characterized along five dimensions: First, internal knowledge development activities, ranging from systematic R&D to informal processes of "doing, using, interacting" [18], are critical not only for cumulative knowledge asset refinement [21,93], but also for the ability of the firm to effectively exploit inputs from outside [35,36,122,153]. Second, the stock of specialized knowledge held by the firm is augmented by the inflow of workers with complementary competences [22,113] and networks [2].…”

“…Collaboration comes with specific organizational challenges and requirements. In order to ensure understanding, assimilation and transformation of partners' competences, the focal firm must be endowed with competences complementary to those of the collaboration partner [122]. The focal firm must also be able to allocate necessary human resources [98] and management attention [123] to the joint project in order to ensure beneficial knowledge exchange.…”

Conditionally-mediated effects of scale in collaborative R&D

“…Assuming that scale, as reflected in the number of partners, is linearly related to cognitive distance, then instead of simply bringing together more and more partners in a consortium, policy planners could attempt to strike a balance between partners that are different enough, so that creativity and learning can be reasonably expected to take place, but not too different as to make dialogue and understanding possible. Difference in technological profiles among partners could be an indicator for such an exercise (Nooteboom et al 2007), which would need to be balanced against prior experience in collaborative projects and experience with working together in past projects (Hoang and Rothaermel 2005;Kale et al 2002). Difference in profiles would allow for diversity whereas familiarity with one another and experience in collaborative projects would ensure ease of communication and trust (Gulati 1995) among the parties involved.…”

Value Creation on Bilateral Cross‐Border Joint Ventures: Evidence from India

“…Absorptive capacity focuses on Copyright (Cohen and Levinthal, 1990;Lane et al, 2006;Makri et al, 2009;Mowery et al, 1996) and exploratory learning for improvement (Lane et al, 2006;Tsai, 2001;Zahra and George, 2002). Absorptive capacity enhances know-how (Lichtenthaler, 2009), tacit knowledge (Noteboom et al, 2005), technological transfer (Bergh and Lim, 2008), skill set adoption (Lavie and Rosenkopf, 2006), and private benefi ts from joint ventures (Wassmer and Dussauge, 2011). Furthermore, absorptive capacity enables a company to identify the value of its partner's external knowledge to fulfi ll the fi rm's motive for CBJV formation (Lane et al, 2001).…”

“…In the context of emerging markets, CBJVs are a useful means to expand a company's knowledge base quickly and costeffi ciently, because risks and costs are shared with the CBJV partner (Baird et al, 1990;Chung and Beamish, 2005). Several scholars have analyzed the positive eff ect of absorptive capacity on fi rm performance (Lane et al, 2001;Lichtenthaler, 2009;Tsai, 2001), as well as the positive infl uence of absorptive capacity on the success of strategic alliances (Chen, 2004;Lavie and Rosenkopf, 2006;Noteboom et al, 2005). Additionally, diff erent studies show that learning capabilities drive the perceived value derived from CBJVs by partner fi rms (Emden et al, 2005).…”