Relationship between knowledge and innovation performance : the mediating role of absorptive capacity

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Date
2008-05
Authors
Khoo, Kah Kheng
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Publisher
Universiti Sains Malaysia
Abstract
One of the defining features of competition in many industries has been the extremely rapid pace of technological change, marked by a continuous stream of innovations. Manufacturing firms, therefore, face the challenge of nurturing existing knowledge and developing novel knowledge in order to create new business opportunities. The firm's knowledge processing capabilities have a central role in endeavors to achieve firm's innovation performance and competitive advantage. Absorptive capacity capabilities and innovation is viewed as an essential part of the firm's success. Absorptive capacity is a highly important organizational capability to recognize value and assimilate external knowledge in order to increase firm's innovativeness. The aim of this study is to determine if the innovation performance can be improved through the absorptive capacity (knowledge acquisition, dissemination and utilization) that is supported by prior knowledge. Structured questionnaire was used in this study. Three hundred and fifty questionnaires were distributed to the manufacturing firms located at the northern region of Malaysia. Only sixty nine useable questionnaires have been collected back. Based on the analysis, firm's experience and contracted R&D was found significantly related to firm's innovation performance. It was also found that the firms operating in a fastchanging environment acquire less external knowledge than those operating in more stable and predictable conditions.
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Keywords
Knowledge and innovation performance
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