The influence of knowledge absorptive capacity on the knowledge-based enterprises performance by explaining the mediating role of innovation strategy and open innovation activities

Document Type : Original Research Paper

Authors

1 Prof., Department of Business Management, Faculty of Business Management, College of Management, University of Tehran, Tehran, Iran.

2 MSc., Department of Business Administration, Faculty of Management, Kharazmi University, Tehran, Iran.

3 PhD student, Department of Business Management, Faculty of Business Management, College of Management, University of Tehran, Tehran, Iran.

10.47176/smok.2024.1822

Abstract

Purpose: Today, the methods of value creation have been transformed by the dynamics of competition. This has intensified the necessity for companies to focus on external knowledge and innovation to generate value. In this regard, the changing economic attitudes of developed countries towards value creation have led to the emergence and growth of knowledge-based enterprises (KBEs) and sustainable wealth generation in these nations. This phenomenon has also attracted the attention of most developing countries, including Iran. However, many studies conducted on Iranian KBEs have explored the literature and recounted the actions and experiences of other countries without considering the specific requirements and environmental conditions governing these companies. The increasing weakening of Iranian knowledge-based companies, due to the gap between their routines and environmental requirements, has prompted managers of these companies to seek the identification and acquisition of new organizational capabilities, as well as to enhance company performance through the adoption and implementation of effective decisions. In order to help these companies, this study examines the impact of knowledge absorptive capacity (KAC) on firm performance (FP), considering the mediating role of innovation strategy (IS) and open innovation (OP) activities.
Methodology: This research has adopted the positivist paradigm. It is applied in purpose and descriptive in nature. Furthermore, it falls under the category of cross-sectional survey research regarding data collection methods. The study population consists of 5,029 KBEs located in Tehran Province. The sample size was determined to be 313 companies using G*Power software. Data were collected online through a standard questionnaire developed by Li et al. (2022), Carrasco-Carvajal et al. (2023), Naqshbandi & Jasimuddin (2018), and Milovanović et al. (2016), utilizing simple random sampling. To assess validity, both face validity and construct validity (convergent and discriminant validity) were employed. Reliability was evaluated using Cronbach's alpha and composite reliability. After confirming the validity and reliability, the research model was analyzed using structural equation modeling (SEM) techniques with SmartPLS 3 software.
Findings: The findings indicated that KAC significantly influences IS, Outbound and Inbound OI, and FP, with path coefficients of 0.409, 0.306, 0.329, and 0.431, and t-statistics of 9.833, 5.740, 6.692, and 11.116, respectively. Furthermore, the significant impact of IS on Outbound and Inbound OI as well as FP was confirmed, with path coefficients of 0.367, 0.265, and 0.438, and t-statistics of 8.607, 3.813, and 11.168, respectively. Additionally, the effect of Inbound OI on FP was confirmed with a path coefficient of 0.248 and a t-statistic of 3.633; however, the effect of Outbound OI on FP was rejected with a path coefficient of 0.068 and a t-statistic of 1.228. Finally, the mediating role of IS was confirmed with a path coefficient of 0.179 and a t-statistic of 2.437, while the mediating roles of Outbound and Inbound OI were rejected with path coefficients of 0.021 and 0.081, and t-statistics of 0.719 and 1.612, respectively.
Research limitations/implications: Despite the significant findings of this study, several limitations must be acknowledged. First, the reliance on self-reported data through a standard questionnaire may introduce response bias, as participants might provide socially desirable answers rather than their true perceptions. To mitigate this, future studies could incorporate qualitative methods, such as interviews or focus groups, to gain deeper insights into the relationship between KAC, SI, OI and FP. Additionally, while the study utilized established scales to measure constructs, the dynamic nature of innovation and market conditions suggests that these constructs may evolve over time. Longitudinal studies could provide a more nuanced understanding of how KAC, IS, and OI activities influence FP across different stages of a firm's lifecycle. Second, the research is confined to KBEs in Tehran Province, which may limit the generalizability of the results to other regions or sectors. Future research could expand the geographic scope. In this context, it is suggested that future researches retest the research model by collecting questionnaires from KBEs in other geographical areas or even the whole country. Finally, the rejection of the mediating roles of Outbound and Inbound OI on FP indicates that further exploration is needed to understand the complexities of these relationships to provide a more comprehensive view of the OI landscape in KBEs. In summary, while this study contributes valuable insights into the interplay between KAC, IS, OI and FP, it also highlights the need for further research to validate and expand upon these findings in broader contexts.
Practical implications: The aim of this research was to enhance theoretical knowledge regarding the impact of KAC on the KBEs performance through the improvement of IS and the promotion of OI activities within these firms. This study has significant managerial and public policy consequences. From a managerial perspective, managers of KBEs should recognize that improving FP depends on creating conditions that enhance innovation-related processes. Therefore, they should prioritize investments in both external knowledge and innovation alongside internal organizational efforts. In this context, the findings indicate that firms with sufficient KAC can better assess their surrounding environment using new technologies, thereby attracting new external knowledge and integrating it into their innovation processes. This capability assists KBEs in developing OI practices by creating effective IS and accelerating the development of new businesses or products. From a public policy standpoint, this research offers crucial insights for policymakers. Open Innovation (OI) serves as an effective innovation strategy that enhances competitive advantages. OI activities can serve as a key entry platform for enhancing collaboration with universities and research institutions, positively increasing the effectiveness of innovation in KBEs and contributing to their overall performance improvement. In this regard, the results demonstrate that KAC is an important factor that positively influences IS as well as OI activities, thereby directly enhancing the KBEs performance. Given that these capabilities enhance innovation strategies and promote both inbound and outbound OI activities, it is imperative for public institutions to support initiatives aimed at cultivating absorptive capacity skills.
Originality/value: This study is the first research that investigates the impact of KAC on the KBEs performance, while also considering the mediating roles of IS, and Outbound and Inbound OI activities. It is the first research to focus on the importance of the relationship between new knowledge and the formulation and implementation of innovation strategies for successful OI in KBEs located in a developing country, as well as the mediating mechanisms that transform market knowledge into high performance.

Keywords

Main Subjects

Copyright ©, Seyed Reza Seyed Javadin, Rasoul Nosratpanah, Aref Ashrafzadeh

License

Published by Imam Hossein University. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

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  • Receive Date: 31 October 2024
  • Revise Date: 14 November 2024
  • Accept Date: 21 December 2024

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