A Multidimensional Study of Absorptive Capacity and Innovation Capacity and Their Impact on Business Performance

Rafael Sancho-Zamora; Santiago Gutiérrez-Broncano; Felipe Hernández-Perlines; Isidro Peña-García

doi:10.3389/fpsyg.2021.751997

A Multidimensional Study of Absorptive Capacity and Innovation Capacity and Their Impact on Business Performance

Front Psychol. 2021 Oct 27:12:751997. doi: 10.3389/fpsyg.2021.751997. eCollection 2021.

Authors

Rafael Sancho-Zamora¹, Santiago Gutiérrez-Broncano², Felipe Hernández-Perlines³, Isidro Peña-García⁴

Affiliations

¹ Department of Business Administration, Faculty of Law and Social Science, University of Castilla-La Mancha, Ciudad Real, Spain.
² Department of Business Administration, Faculty of Social Science, University of Castilla-La Mancha, Talavera de la Reina, Spain.
³ Department of Business Administration, Faculty of Law and Social Science, University of Castilla-La Mancha, Toledo, Spain.
⁴ Department of Business Administration, School of Computer Engineering, University of Castilla-La Mancha, Ciudad Real, Spain.

Abstract

The aim of this paper is to understand how absorptive capacity and innovativeness influence business performance. Most previous studies have not considered the different dimensions of absorptive capacity and innovativeness. As a consequence, they have not analyzed the relationships between these dimensions, such as potential and realized absorptive capacity (RACAP) and product and process innovation. In our study, we analyzed the relationships between each of these dimensions and their effect on organizational performance. To achieve this, in addition to the theoretical foundation provided by the working hypotheses, a questionnaire was sent to 800 CEOs of Spanish companies in different sectors, obtaining a response rate of 38.25%. Structural equation modeling was applied to test the hypotheses. This study confirms the positive effect of absorptive capacity on innovation capacity, which in turn has a positive effect on business performance. Moreover, different dimensions of absorptive capacity and innovativeness play an important role in these relationships. This study contributes to a better understanding of how potential and RACAP influence the innovativeness of firms, both in their ability to innovate products and to improve business processes. In addition, it explores how these different innovations impact business performance and provide firms with knowledge on how to invest resources to increase profits. Future research should further study the inner workings of each of the dimensions analyzed to determine the importance of each dimension for business performance.

Keywords: absorptive capacity; innovation capacity; organizational performance; potential absorptive capacity; process innovation; product innovation; realized absorptive capacity.