Absorptive capacity and technology: influences on innovative firms

Abstract

Purpose The purpose of this paper is to analyze the relationship between agile production (flexible production technology) and absorptive capacity. Design/methodology/approach We use a database of 1,864 Spanish industrial firms from the Survey of Business Strategies (the largest Spanish database of its kind). Our theoretical approach is based on the resource-based view and the dynamic capabilities perspective. The methodology includes descriptive statistics analysis and lineal regression with moderator effect. Findings High-agile firms with greater absorptive capacity are more innovative and better performers than low-agile firms. Absorptive capacity moderates the relationship between flexible production technology and innovation performance. Research limitations/implications This is a cross-sectional study, which may limit the establishment of causal relationships. We give evidence to the importance of studying absorptive capacity in the agile production implementation process. Practical implications There are several managerial implications. First, agile production systems should be integrated into the firm’s innovation system because the continuous improvement of agile production has to be reinforced by the outputs of external knowledge and in-house innovation activities. Second firms that use external sources of knowledge to improve production processes could leverage that benefit better, not only in Operations but also in innovation performance. The adoption of flexible production technology cannot be kept apart from the firm´s organizational learning processes based on external knowledge. Our results also support the contribution of clusters of collaborative firms to improve their production processes throughout absorptive capacity and thus the implementation of agile production systems. Originality/value This is the first study, to the best of our knowledge, has involved the role of absorptive capacity, as an internal capability/competence, to influence the relationship between agility/flexible technology and innovation performance.