Abstract: Despite being one of the most prominent concepts in the current management literature, our understanding of absorptive capacity (AC) – the ability to assimilate external knowledge – is still limited. Particularly, previous research has assumed away the costs of AC, implicitly claiming that more AC is always better. We develop a fit perspective between levels of AC and external knowledge sourcing (EKS), arguing that firms combining high levels of AC with low levels of EKS bear the costs of building and maintaining AC without recouping these investments. In line with our theoretical arguments, empirical evidence on 175 European firms shows that AC yields superior financial performance implications when it is matched by high levels of EKS.

Abstract: Absorptive capacity is one of the most widely used concepts in strategic management. Yet, findings on the effect of absorptive capacity on leveraging of external knowledge are fragmented and inconsistent in the literature. Using meta-analytic procedures, we distill and synthesize existing findings on the role of absorptive capacity (AC) on three areas: performance outcomes, source of external knowledge, and measures of AC. Our preliminary results show that the effects of AC do vary based on these three areas. Our comparison and integration of findings across studies provide cumulative evidence on AC and its role and has important implications for future research.

Abstract: This paper explores how firms’ capabilities shape their acquisition of inventions from outside sources. Innovation capabilities may represent the ability to invent, the ability to commercialize, or both. We construct and test a model that predicts the effects of invention and commercialization capabilities, respectively, on the external sourcing of inventions. The former may dampen firm demand for external inventions, whereas the latter does not. To test our theory, we develop a latent class discrete choice model to construct a “capability index” using newly collected data on 6,685 U.S. firms. We find less capable firms are more likely to use external sources, suggesting a substitution effect. When they do source externally, however, highly capable firms are more likely to source from universities, contractors or independent inventors.

Abstract: Integrating the knowledge based view of the firm with transaction cost economics, this study conceptually explores and empirically examines two key ways that knowledge influences strategic integration or disintegration (i.e., outsourcing) decisions. The first arises from the need to protect valuable knowledge embedded in product innovations, while the second arises from the need for knowledge that may be accrued from outside industry sources. Using data from the semiconductor industry, we test hypotheses regarding the relationship between these two forms of knowledge (i.e., new product knowledge and industry knowledge) and the decision to organize production internally through vertical integration or externally through outsourcing.

Abstract: Gaining access to technologies not owned by the firm itself has frequently been characterized as a fundamental reason behind research partnerships. In this paper, we analyze how firms may learn to collaborate in technology development over time. We argue that collaborative experience with domestic and international research partnerships creates knowledge repositories on how to collaborate. We suggest that due to path-dependence and lock-in effects domestic and international collaborative experience only facilitates the respective type of research partnership. However, knowledge repositories may actually interact, either with each other or with the absorptive capacity of the firm, to become transferable. Firms with higher absorptive capacity are found to be less likely to suffer from lock-in and path-dependence in their collaborative efforts. Based on patent application data of the population of Danish firms at the European Patent Office in the period from 1978 to 2002 we largely find support for our hypotheses.

Abstract: Recent research (Pisano & Shih 2012; Berger 2013) argues that, when innovation is embedded into the process, design and manufacturing need to colocate in home country to secure current and future innovation. While fashion has been shown to be a process-embedded innovation industry and thus an excellent candidate for re-location, macro -economic data cannot confirm such trend. Based on this contradiction, our work uses an inductive approach and aims at understanding the truth behind the buzz. The qualitative analysis of 18 location decisions strategies shows that very few firms actually re-shore. A few increase the share of manufacturing in close locations. But a range of alternative strategies not to separate design from manufacturing or to facilitate coordination between these two activities is found and described.