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Absorptive Capacity and Firms’ Generation of Innovation - Revisiting Zahra and George’s Model

Dina Pereira and João Leitão ()
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Dina Pereira: University of Beira Interior (UBI), UBImedical, CEG-IST, University of Lisbon

No 96, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: The firm’s absorptive capacity triggers its propensity to capture external knowledge, spurred by internal levers and cooperation liaisons, stimulating innovativeness. This paper revisits Zahra and George’s model of absorptive capacity and others, analysing the firm’s internal and liaison factors that affect its absorptive capacity, in order to predict their influence on innovation. Being the firm an open system, managers acknowledging such effects can design a more efficient open innovation business model in order to generate more innovation. We analyse firm-level internal indicators measuring firm’s absorptive capacity and a set of liaison factors, using a Portuguese sample of 571 service firms and 562 manufacturing firms that participated in the European Community Innovation Survey (CIS), 2010. Results reveal that internal R&D, acquisition of external R&D, acquisition of external knowledge (i.e., equipment, software, licenses and employee training) affect firms' generation of innovation, according to the different sub-samples, which provides several implications for science and innovation policy.

Keywords: Absorptive Capacity; Innovation; Liaisons; Internal and External Knowledge (search for similar items in EconPapers)
JEL-codes: M20 M21 L25 L26 O32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-eur, nep-ino, nep-knm and nep-sbm
Date: 2018-02, Revised 2018-02
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http://www.gee.gov.pt//RePEc/WorkingPapers/GEE_PAPERS_96.pdf First version, 2018 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:mde:wpaper:0096

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