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

Author

Listed:
  • Dina Pereira

    (University of Beira Interior (UBI), UBImedical, CEG-IST, University of Lisbon)

  • João Leitão

    (University of Beira Interior (UBI), CEG-IST, University of Lisbon & C-MAST, UBI, Instituto Multidisplinar de Empresa, Universidad de Salamanca)

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.

Suggested Citation

  • Dina Pereira & João Leitão, 2018. "Absorptive Capacity and Firms’ Generation of Innovation - Revisiting Zahra and George’s Model," GEE Papers 0096, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Feb 2018.
    • Handle: RePEc:mde:wpaper:0096
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    File URL: https://www.gee.gov.pt//RePEc/WorkingPapers/GEE_PAPERS_96.pdf
    File Function: First version, 2018
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    More about this item

    Keywords

    Absorptive Capacity; Innovation; Liaisons; Internal and External Knowledge;
    All these keywords.

    JEL classification:

    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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