Three Essays on Absorptive Capacity beyond R&D

Abstract

In times of technological dynamics, knowledge intensification and increasing networking between business stakeholders, absorptive capacity has become one of the most prominent concepts in innovation and management research. However, despite the attention devoted to absorptive capacity in the academic community, there is still a limited understanding of how firms without institutionalised R&D departments and formal R&D expenditure can absorb and leverage external knowledge successfully. With its strong focus on R&D-intensive firms and high-tech industries as well as on R&D-related aspects, existing research has overlooked the variety in patterns of knowledge absorption and, due to its reliance on inappropriate measures, tends to underestimate absorptive capacity in non-R&D firms.

Therefore, the overall objective of this dissertation is to advance our understanding of absorptive capacity beyond the R&D-based context by providing novel empirical insights on how non-R&D-performing manufacturing firms build their AC to access and leverage external knowledge successfully in their innovation activities.

The dissertation consists of three distinct but complementary research papers. The empirical analyses in these papers are based on the qualitative data from multiple case studies of four non-R&D-performing German manufacturing firms, as well as the quantitative cross-sectional data from the German Manufacturing Survey 2015.

In the first paper, which relies on qualitative data, I explore how non-R&D firms organise their efforts to deploy absorptive capacity, and which personnel resources and organisational practices they rely on. The empirical results provide in-depth insights into the nature and specific character of the AC process in the non-R&D context, and highlight the focal role of a few key absorptive agents in the configuration of absorptive capacity. A crucial factor for success is the integration of these individuals into the process of absorptive capacity by means of aligned organisational practices.

Based on the quantitative cross-sectional data, the second paper compares non-R&D and R&D SMEs in terms of their openness to external knowledge and major external sources of innovation impulses. Further, it takes a deeper look at non-R&D SMEs and examines how the internal organisation of absorptive capacity in these firms varies depending on the type of external knowledge source targeted. The results indicate that both non-R&D and R&D SMEs are open to external knowledge sources to a similar degree. However, non-R&D SMEs are more likely to search for innovation knowledge from suppliers and less likely to search for science-based knowledge than R&D SMEs do. Moreover, the results show that different search patterns are associated with different modes of knowledge absorption.

The third and final paper explores the heterogeneity in patterns of absorptive capacity and explains how the configuration of absorptive capacity is shaped by a firm’s dominant innovation mode. To address its research objective, the paper develops an integrated conceptual framework of absorptive capacity that offers a more differentiated perspective of absorptive capacity and enables the investigation of heterogeneous configurations of absorptive capacity across different types of firms. The framework was illustrated and tested using the qualitative data from the case studies with non-R&D performing firms and was shown to be appropriate for the operationalisation of absorptive capacity configurations associated with the Doing, Using and Interacting (DUI) mode of innovation and practical, tacit knowledge. This makes this framework particularly relevant for non-R&D firms and SMEs.

This dissertation contributes to innovation management research and enriches the absorptive capacity literature in several important ways. First, by responding to the call to explore absorptive capacity beyond the R&D-based context, this dissertation provides novel empirical insights into the hitherto overlooked empirical context of non-R&D manufacturing firms. It brings more conceptual clarity and explains how non-R&D firms manage to build absorptive capacity directed towards strategically relevant knowledge. Second, this dissertation proposes a holistic conceptual framework that integrates fragmented findings from different research fields on the underlying building blocks of absorptive capacity, such as dimensions, constitutive elements and microfoundations. In doing so, it enriches our understanding of the internal configuration of a firm’s absorptive capacity. Third, this dissertation explores and explains inter-firm heterogeneity in patterns of absorptive capacity, which has received little attention in the previous literature. Thus, the dissertation provides a broader understanding of absorptive capacity beyond R&D and explains how firms can build and develop their absorptive capacity in a more differentiated manner. Finally, this dissertation, and in particular the developed framework, can serve as the cornerstone for the improved, more comprehensive operationalisation and measurement of absorptive capacity.