Impact of Entrepreneurial Orientation on Innovation Capability: The Mediating Role of Absorptive Capability and Organizational Learning Capabilities

Lahcene Makhloufi, Abderrazak Ahmed Laghouag, Alhussain Ali Sahli and Belaid Fateh
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Lahcene Makhloufi: Department of Technology Management and Logistics, College of Business, University Utara, Sintok 06010, Malaysia
Abderrazak Ahmed Laghouag: Department of Business Administrative, College of Business, King Khalid University, Abha 62552, Saudi Arabia
Alhussain Ali Sahli: Department of Business Administrative, College of Business, King Khalid University, Abha 62552, Saudi Arabia

Sustainability, 2021, vol. 13, issue 10, 1-20

Abstract: Learning and knowledge creation are acknowledged as crucial drivers associated with entrepreneurial orientation (EO) and innovation capability (IC). Absorptive capacity (AC) harmonizes internal innovation-building activities with external opportunities, while organizational learning capabilities (OLC) foster entrepreneurial cognitive skills and innovation capabilities. This study aims to (1) predict the impact of absorptive capacity and organizational learning on IC and (2) to estimate the mediation effect of OLC and AC on the relationship between entrepreneurial orientation and innovation capabilities. Drawing upon the dynamic capability theory, the study had applied a cross-sectional survey targeting Algerian firms to test the hypotheses. The study findings indicate that EO is positively associated with innovation capability. Besides, even though both OLC and AC partially increase EO’s interaction impact on innovation capability as a mediation role, suggesting that the more a firm is entrepreneurially oriented, the more learning and knowledge creation processes are involved in the interaction relationship. This study’s core focus is to overcome the substantial role of learning and knowledge creation processes as an intangible proactive resource that fosters the EO mindset to get involved in innovation activities. It has been discovered that AC and OLC as a connectedness mechanism links external knowledge and internal learning processes to accompany EO readiness during innovation development.

Keywords: entrepreneurship orientation; organizational learning capability; innovation capability; absorptive capacity; dynamic capability view (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Working Paper: Impact of Entrepreneurial Orientation on Innovation Capability: The Mediating Role of Absorptive Capability and Organizational Learning Capabilities (2021)
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