Absorptive capacity and technology innovation: A system dynamics model

Abstract

This research is about the mechanisms and development of absorptive capacity and technology innovation of enterprises through cooperating with external organizations in the open innovative environment. System dynamics is applied to model this case. The conclusion is that, in the open innovative environment, the process of organizational cooperation and knowledge absorption indeed has a strong influence on the development of knowledge storage and technology innovation through interacting of various factors and relationships. And the influence can be effectively measured and actively controlled. Then, several policy alternatives to improve the system behaviour are conducted to test their functioning on the model.