Depth and breadth of external knowledge search and performance: The mediating role of absorptive capacity

Nowadays it is commonly accepted that exploiting external knowledge sources is important for firms' innovation and performance. However, it is still not clear how this effect takes place and what internal capabilities are involved in the process. We propose to open the black box between externa...

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Bibliographic Details
Published in:Industrial marketing management 2015-05, Vol.47, p.86-97
Main Authors: Ferreras-Méndez, José Luis, Newell, Sue, Fernández-Mesa, Anabel, Alegre, Joaquín
Format: Article
Language:English
Subjects:
Absorptive capacity
Biotechnology industry
Breadth
Business management
Depth
Financial performance
Innovation
Innovations
Knowledge
Knowledge management
Least squares method
Marketing
Pharmaceutical industry
Studies
Western Europe
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Summary:Nowadays it is commonly accepted that exploiting external knowledge sources is important for firms' innovation and performance. However, it is still not clear how this effect takes place and what internal capabilities are involved in the process. We propose to open the black box between external knowledge search strategies, and innovation and performance by proposing absorptive capacity (AC) as the mediating variable. A sample of 102 biotechnology firms from Spain is used to test the proposed theoretical model through structural equation modeling taking the partial least squares approach. Results suggest that AC acts as a full mediator in the relationship between the depth of external knowledge search and the innovation and business performance of the firm. Finally, some suggestions for managers and future lines of research are highlighted. •We analyze empirically the multidimensional nature of absorptive capacity (AC) in the context of firm’s openness.•We propose AC as mediating variable in the relationship between external knowledge search strategies and performance.•Results suggest AC as a dynamic capability that allows firms to successfully generate innovations and increase performance.•We test our hypothesis in a sample of 102 firms from the Biotechnology sector of Spain.
ISSN:0019-8501
1873-2062
DOI:10.1016/j.indmarman.2015.02.038