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How do incentives motivate absorptive capacity development? The mediating role of employee learning and relational contingencies

Liwen Wang, Jane Zheng Zhao and Kevin Zheng Zhou

Journal of Business Research, 2018, vol. 85, issue C, 226-237

Abstract: This study explores the antecedents of a firm's absorptive capacity by examining the role of innovation incentives. Building on expectancy theory and equity theory, we argue that innovation incentives enhance absorptive capacity through promoting employees learning; and the effectiveness of incentives is positively moderated by teamwork (i.e., horizontal relation) but negatively moderated by transformational leadership (i.e., vertical relation). To test our hypotheses, we employ a multi-respondent research design based on a sample of 102 Chinese automotive companies. The results show strong support for the hypotheses and demonstrate the positive impact of innovation incentives on a firm's absorptive capacity through the mediating role of employee learning, as well as the moderating effect of the relational context in shaping the influences of innovation incentives.

Keywords: Absorptive capacity; Innovation incentives; Employee learning; Relational context; Expectancy theory; Equity theory (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:85:y:2018:i:c:p:226-237

DOI: 10.1016/j.jbusres.2018.01.010

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