Leadership Styles, Absorptive Capacity and Firm's Innovation

Abstract

The aim of this article is to investigate the relationship between leadership styles, absorptive capacity and firm's innovation in the Jordanian Pharmaceutical sector. It is a knowledge-intensive industry and one where effective leadership has been very substantial. Findings reveal that transformational leadership style and transactional leadership style are antecedents to absorptive capacity and a firm's innovation. The results confirm a significant and direct relationship between both leadership styles and firm innovation, and indirectly through absorptive capacity. Overall, the research's findings provide valuable insights for managers to foster absorptive capacity and innovation of their firms.