Zahra georgia state university gerard george university of wisconsinmadison researchers have used the absorptive capacity construct to explain various organi zational phenomena. Cohen and levinthal define acap as a firms ability to recognize the value of new external knowledge. Cohen and levinthals landmark piece on absorptive capacity. Isbn 9781847206473 full text not archived in this repository. Absorptive capacity refers to the ability of an organisation or region to identify, assimilate and exploit knowledge from the environment cohen and levinthal, 1989. Absorptive capacity, technological innovation, and product. Introduction absorptive capacity is defined as the ability to recognize the value of new external knowledge, assimilate it, and apply it to commercial ends cohen and levinthal, 1990. This paper introduces the concept or theory of absorptive capacity ac which the authors define as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. A novel approach to national technological accumulation and.
In their 1990 paper, cohen and levinthal point out that an organizations absorptive capacity is not resident in any single individual but depends on the link across a mosaic of individual capabilities cohen and levinthal, 1990. Despite this notion, research in absorptive capacity has focused on organizational level and defined absorptive capacity as an organizational level. However, the way absorptive capacity is actually implemented in firms remains relatively poorly known. This includes determining which new information is useful and then applying it to the organization so that it. A new perspective on learning and innovation wesley m. Furthermore, how absorptive capacity influences the. Absorptive capacity was introduced by cohen and levinthal in 1990. Managing potential and realized absorptive capacity repub. Almost half of the 98 papers use absorptive capacity as theoretical support, and the remaining papers use absorptive capacity in the research model percent of papers or as a theoretical base 5 per cent of papers. They suggested that prior relevant knowledge improves an individuals. Cohen and levinthal 1990 proposed that absorptive capacity is, for a large part, a.
Absorptive capacity literature cohen and levinthal, 1990. Absorptive capacity is usually proxied by the technology gap between the foreign and the domestic. Absorptive capacity is a method by which an organization processes new information and translates it for its own commercial benefit. A rereading of the seminal cohen and levinthal 1990 article in light of current research on learning and innovation directs our attention to serious ambiguities and omissions in zahra and georges reconceptualization. This includes determining which new information is useful and then applying it to the organization so that it will produce tangible results. A long time back two researcher, cohen and levinthal 1990 pioneered the concept of absorptive capacity, further defined as the ability of an organization to identify, value, assimilate, and apply new knowledge.
The conceptualisation of absorptive capacity in technology transfer tt in construction organisations could occur simultaneously, involving the flow of imported technology i. Mar 09, 2018 absorptive capacity is an innovative concept. Volberda erim report series research in management erim report series reference number ers2003035str. Absorptive capacity, the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities.
In doing so, we acknowledge that significant crossborder effects due to the role of both inward and outward fdi exist and that. Levinthal university of pennsylvania in this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative. Kedia and bhagat 1988 first coined the term absorptive capacity acap, which then since received considerable attention after the work of cohen and levinthal 1990. They suggested that absorptive capacity is largely a function of the firms level of prior related knowledge. The concept of absorptive capacity in technology transfer tt. Pdf absorptive capacity is regarded as an important factor in both corporate. The effect of organizational structure on absorptive capacity. Mar 06, 2020 absorptive capacity is a method by which an organization processes new information and translates it for its own commercial benefit. In addition, it is argued that the ability to evaluate and use outside knowledge is largely a function of the level of prior related knowledgei. The authors suggest that this is largely a function of the organizations prior knowledge and experience.
This study focuses on the absorptive capacity of emerging and mena economies. Organizational learning capacity and organizational. How to realize its potential in the organization field abstract the purpose of this perspective paper is to advance understanding of absorptive capacity, its underlying dimensions, its multilevel antecedents, its impact on firm performance and the contextual factors that affect absorptive capacity. Our results indicate that the relationship between absorptive capacity and new product development performance is nonlinear. Jul 14, 2014 since the cohen and levinthal article on absorptive capacity was published, the ability to recognize the value of new information, to assimilate it, and apply it to commercial ends p.
Zahra and george 2002 develop a model which concentrates on the internal processes of absorptive capacity, adding two main refinements to the original concept proposed by cohen and levinthal 1989, 1990. Absorptive capacity, as defined by cohen and levinthal, 1989, cohen and. Conceptually, it is similar to information processing theory, but at the firm level rather than the individual level. Toward a valuesensitive absorptive capacity framework. Since the cohen and levinthal article on absorptive capacity was published, the ability to recognize the value of new information, to assimilate it, and apply it to commercial ends p. Discusses the notion that the ability to exploit external knowledge is crucial to a firms innovative capabilities. A firmlevel analysis of absorptive capacity for different kinds of knowledge. Most of the time, success in this regard highly depends on how a firm collects and adopts new information. Their combined citations are counted only for the first article.
The development of absorptive capacity based innovation in a. Swiss federal institute of technology zurich ethz abstract we merge research into knowledge management, absorptive capacity, and. This raises the issue of what is known as the absorptive capacity of the country. Project muse absorptive capacity at the individual level. The concept of absorptive capacity was made popular by cohen and levinthal 1990 and according to them, absorptive capacity is the ability to recognize the value of new information, to assimilate it, and apply it to commercial ends. Absorptive capacity acap is what enables an organization effectively to acquire, use, transform and implement information vital for the growth of a knowledgesharing. The absorptive capacity factors examined are the following. Zahra and george 2002 suggested a reconceptualization of the absorptive capacity construct in order to reduce ambiguity in empirical studies. Accordingly, absorptive capacity may contribute to firms innovation performance by operating both as a tool for processing new external knowledge, as well as a pathway for transferring the necessary knowledge for crossorganizational innovation activities. A rereading of the seminal cohen and levinthal 1990 article in light of current research on learning and innovation directs our attention to serious ambiguities and omissions in zahra and georges. The concept of absorptive capacity was put forward and applied to the firm level by cohen and levinthal. How individuals engage in the absorption of new external. The absorptive capacity is the ability of the firm to assimilate imported technology.
Zahra and george, 2002 highlights the importance of taking in external knowledge, combining it with. Cohen and levinthal, 1989, zahra and george, 2002 and the firms links to external sources of. A firms absorptive capacity relates positively to innovation performance. Pdf absorptive capacity and technological innovation. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Cohen wm and levinthal da 1990 absorptive capacity a new. The organizational and geographic drivers of absorptive capacity. Absorptive capacity is the firms ability to acquire, assimilate, transform, and exploit knowledge. The paper develops a more precise specification and understanding of the process of nationallevel knowledge accumulation and absorptive capabilities by applying the reasoning and evidence from the firmlevel analysis pioneered by cohen and levinthal 1989, 1990. For massachusetts, we picked biogen later renamed biogen idec after a merger.
In other words, absorptive limits are a way for firms to find ideas and implement them. Cohen wm and levinthal da 1990 absorptive capacity a new perspective on from economics essay at university of the punjab. This study adheres to the three components of ac conceptualized by cohen and levinthal 1989, 1990. The moderating role of absorptive capacity and the. Cohen and levinthal 1990 absorptive capacity a new perspective on learning and innovation administrative science quarterly volume 35 issue 1 pg 128 152. Since their 1990 publication, the concept has been further developed and given rise to many thousands of published papers around this.
University of illinois at urbanachampaigns academy for entrepreneurial leadership historical research reference in entrepreneurship. Thirtyseven percent of the studies 37 papers use cohen and levinthal as a minor citation. This is essential to building its capabilities and competencies regarding innovation. First, they distinguish between potential absorptive capacity pacap, which includes. The effect of organizational structure on absorptive. Pdf cohen and levinthal 1990 absorptive capacity a new. The effect of organizational structure on absorptive capacity in single and dual learning modes. How to examine educational organization absorptive. The concept of absorptive capacity in technology transfer. Absorptive capacity is originally defined by cohen and levinthal as a firmlevel construct regarding a firms ability to recognize the value of new, external knowledge, assimilate it, and apply it to commercial ends p. Absorptive capacity, knowledge management and innovation.
Our results indicate that the relationship between absorptive capacity and new product development performance is. Absorptive capacity is a firms ability to identify valuable external knowledge, assimilate or transform this knowledge into the firms knowledge base, and apply this new knowledge through innovation and competitive actions cohen and levinthal 1990. The article is based on research literature analysis and deals with the question how to examine educational organization absorptive capacity in the aspect of pedagogical innovations. Few studies have captured the richness and multidimensionality of absorptive capacity, and it remains to be understood how the dimensions of the phenomenon convert knowledge. Although cohen and levinthal 1990 discussed absorptive capacity as it relates to innovation at the organizational level, they acknowledged that their concept of absorptive capacity is based on research at the individual level. A novel approach to national technological accumulation.
An organization with substantial absorptive capacity, they argued, is able to locate. Sources of knowledge such as acquisitions, mergers. In doing so, we acknowledge that significant crossborder effects due to the role of both inward and. Absorptive capacity and technological innovation shake r a. Put another way, absorptive capacity is a limit to the rate or quantity of scientific or technological information that a firm can absorb. It is advisable to refer to the publishers version if you intend to cite. Developing and maintaining absorptive capacity is vital to a firms longterm survival and. Absorptive capacity, innovation, and financial performance. Pdf operationalization of absorptive capacity researchgate.
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