Skip to main content
Log in

Service Absorptive Capacity: Its Evolution and Implications for Innovation

  • Published:
Journal of the Knowledge Economy Aims and scope Submit manuscript

Abstract

The concept of absorptive capacity has been part of the strategy and innovation discourse for a few decades. As industry and business practices have evolved, so has the understanding of the mechanisms responsible for developing and growing the absorptive capacity of contemporary organizations. In this paper, we trace the evolution of this concept and its operationalization and measurement. We particularly investigate how absorptive capacity can be used as a potential anchor of innovation research in service industries. We suggested the conceptualization of a service absorptive capacity and propose different measures that could aid to this conceptualization. We also provide an alternative to the predominant focus on the functional characteristics and research and development practices in innovation studies to date.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6

Similar content being viewed by others

Notes

  1. Source: EBSCOHost database.

References

  1. Amit R, Schoemaker PJH (1993) Strategic assets and organizational rent. Strateg Manag J 14(1):33–46

    Article  Google Scholar 

  2. Anh PT, Baughn CC, Hang NTM, Neupert KE (2006) Knowledge acquisition from foreign parents in international joint ventures: an empirical study in Vietnam. Int Bus Rev 15(5):463–487. doi:10.1016/j.ibusrev.2006.05.004

    Article  Google Scholar 

  3. Arbussà A, Coenders G (2007) Innovation activities, use of appropriation instruments and absorptive capacity: evidence from Spanish firms. Res Policy 36(10):1545–1558. doi:10.1016/j.respol.2007.04.013

    Article  Google Scholar 

  4. Barney J (1991) Firm resources and sustained competitive advantage. J Manag 17(1):99

    Article  Google Scholar 

  5. Becker W, Peters J (2000) Technological opportunities, absorptive capacities and innovation. Paper presented at the Eighth International Joseph A. Schumpeter Society Conference Centre for Research in Innovation and Competition (CRIC), Manchester, UK, 28 June–1 July

  6. Benson D, Ziedonis RH (2009) Corporate venture capital as a window on new technologies: implications for the performance of corporate investors when acquiring startups. Organ Sci 20(2):329–351

    Article  Google Scholar 

  7. Bergh DD, Lim EN-K (2008) Learning how to restructure: absorptive capacity and improvisational views of restructuring actions and performance. Strateg Manag J 29(6):593–616. doi:10.1002/smj.676

    Article  Google Scholar 

  8. Berry H (2006) Leaders, laggards, and the pursuit of foreign knowledge. Strateg Manag J 27(2):151–168. doi:10.1002/smj.509

    Article  Google Scholar 

  9. Bierly PE, Damanpour F, Santoro MD (2009) The application of external knowledge: organizational conditions for exploration and exploitation. J Manag Stud 46(3):481–509. doi:10.1111/j.1467-6486.2009.00829.x

    Article  Google Scholar 

  10. Bitner MJ, Brown SW (2006) The evolution and discovery o services science in business schools. Commun ACM 49(7):73–78

    Article  Google Scholar 

  11. Boynton AC, Zmud RW, Jacobs GC (1994) The influence of it management practice on it use in large organizations. MIS Q 18(3):299–318

    Article  Google Scholar 

  12. Cadiz D, Sawyer JE, Griffith TL (2009) Developing and validating field measurement scales for absorptive capacity and experienced community of practice. Educ Psychol Meas 69(6):1035–1038. doi:10.1177/0013164409344494

    Article  Google Scholar 

  13. Camisón C, Forés B (2010) Knowledge absorptive capacity: new insights for its conceptualization and measurement. J Bus Res 63(7):707–715. doi:10.1016/j.jbusres.2009.04.022

    Article  Google Scholar 

  14. Chen Y-S, Lin M-JJ, Chang C-H (2009) The positive effects of relationship learning and absorptive capacity on innovation performance and competitive advantage in industrial markets. Ind Mark Manag 38(2):152–158. doi:10.1016/j.indmarman.2008.12.003

    Article  Google Scholar 

  15. Chesbrough H, Spohrer J (2006) A research manifesto for services science. Commun ACM 49(7):35–40

    Article  Google Scholar 

  16. Cohen PA, Kulik JA, Kulik C-LC (1982) Educational outcomes of tutoring: a meta-analysis of findings. Am Educ Res J 19(2):237–248

    Google Scholar 

  17. Cohen WM, Levinthal DA (1990) Absorptive capacity: a new perspective on learning and innovation. Adm Sci Q 35(1):128–152

    Article  Google Scholar 

  18. Cotton JL, Tuttle JM (1986) Employee turnover: a meta-analysis and review with implications for research. Acad Manag Rev 11(1):55–70

    Google Scholar 

  19. Day GS (1994) The capabilities of market-driven organizations. J Mark 58(4):37

    Article  Google Scholar 

  20. Deeds DL (2001) The role of R&D intensity, technical development and absorptive capacity in creating entrepreneurial wealth in high technology start-ups. J Eng Technol Manag 18(1):29

    Article  Google Scholar 

  21. Diao Y (2007) Using control theory to improve productivity of service systems. Paper presented at the IEEE International Conference on Services Computing, July 2007

  22. Drejer I (2004) Identifying innovation in surveys of services: a Schumpeterian perspective. Res Policy 33(3):551. doi:10.1016/j.respol.2003.07.004

    Article  Google Scholar 

  23. Dyer JH, Singh H (1998) The relational view: cooperative strategy and sources of interorganizational competitive advantage. Acad Manag Rev 23(4):660–679

    Google Scholar 

  24. Eriksson K, Chetty S (2003) The effect of experience and absorptive capacity on foreign market knowledge. Int Bus Rev 12(6):673. doi:10.1016/j.ibusrev.2003.07.001

    Article  Google Scholar 

  25. Escribano A, Fosfuri A, Tribó JA (2009) Managing external knowledge flows: the moderating role of absorptive capacity. Res Policy 38(1):96–105. doi:10.1016/j.respol.2008.10.022

    Article  Google Scholar 

  26. ESSEC_Business_School (2010) Ranking of journal 2009/2010 by group

  27. Fabrizio KR (2009) Absorptive capacity and the search for innovation. Res Policy 38(2):255–267. doi:10.1016/j.respol.2008.10.023

    Article  Google Scholar 

  28. Fiol CM (1996) Squeezing harder doesn’t always work: continuing the search for consistency in innovation research. Acad Manag Rev 21(4):1012–1021

    Article  Google Scholar 

  29. Frost TS, Changhui Z (2005) R&D co-practice and ‘reverse’ knowledge integration in multinational firms. J Int Bus Stud 36(6):676–687. doi:10.1057/palgrave.jibs.8400168

    Article  Google Scholar 

  30. Gadrey J (1996) Une économie de services, 2nd edn. La Decouverte, Paris

    Google Scholar 

  31. Gallouj F (2002) Innovation in services and the attendant old and new myths. J Socio-Econ 31(2):137–154. doi:10.1016/s1053-5357(01)00126-3

    Article  Google Scholar 

  32. Gallouj F, Weinstein O (1997) Innovation in services. Res Policy 26(4–5):537–556

    Article  Google Scholar 

  33. George G, Zahra SA, Wheatley KK, Khan R (2001) The effects of alliance portfolio characteristics and absorptive capacity on performance a study of biotechnology firms. J High Technol Manag Res 12(2):205

    Article  Google Scholar 

  34. Gomez J, Vargas P (2009) The effect of financial constraints, absorptive capacity and complementarities on the adoption of multiple process technologies. Res Policy 38(1):106–119. doi:10.1016/j.respol.2008.10.013

    Article  Google Scholar 

  35. Grant RM (1991) The resource-based theory of competitive advantage: implications for strategy formulation. Calif Manag Rev 33(3):114–135

    Google Scholar 

  36. Grant RM (1996) Toward a knowledge-based theory of the firm. Strateg Manag J 17:109–122

    Article  Google Scholar 

  37. Gronroos C (1990) Service management and marketing—managing the moments of truth in service competition. Lexington Books, Lexington

    Google Scholar 

  38. Harrington SJ, Guimaraes T (2005) Corporate culture, absorptive capacity and it success. Inf Organ 15(1):39–63. doi:10.1016/j.infoandorg.2004.10.002

    Article  Google Scholar 

  39. Hervas-Oliver J-L, Albors-Garrigos J (2009) The role of the firm’s internal and relational capabilities in clusters: when distance and embeddedness are not enough to explain innovation. J Econ Geogr 9(2):263–283. doi:10.1093/jeg/lbn033

    Article  Google Scholar 

  40. Hill TP (1977) On goods and services. Rev Income & Wealth 23(4):315–338

    Article  Google Scholar 

  41. Hipp C, Grupp H (2005) Innovation in the service sector: the demand for service-specific innovation measurement concepts and typologies. Res Policy 34(4):517–535. doi:10.1016/j.respol.2005.03.002

    Article  Google Scholar 

  42. Howells J (2006) Where to from here for service innovation? Knowledge Intensive Services Activities (KISA) conference (vol. March 22nd), Sydney, Australia

  43. IBM (2006) Services definition. Services sciences, management and engineering. http://www.research.ibm.com/ssme/services.shtml. Accessed 9 October 2006

  44. Jansen JJP, Van Den Bosch FAJ, Volberda HW (2005) Managing potential and realized absorptive capacity: how do organizational antecedents matter? Acad Manag J 48(6):999–1015

    Article  Google Scholar 

  45. Kim C-S, Inkpen AC (2005) Cross-border R&D alliances, absorptive capacity and technology learning. J Int Manag 11(3):313–329. doi:10.1016/j.intman.2005.06.002

    Article  Google Scholar 

  46. Kim L (1998) Crisis construction and organizational learning: capability building in catching-up at Hyundai Motor. Organ Sci 9(4):506–521

    Article  Google Scholar 

  47. Lado AA, Boyd NG, Wright P (1992) A competency-based model of sustainable competitive advantage: toward a conceptual integration. J Manag 18(1):77

    Article  Google Scholar 

  48. Lane PJ, Koka BR, Pathak S (2006) The reification of absorptive capacity: a critical review and rejuvenation of the construct. Acad Manag Rev 31(4):833–863

    Article  Google Scholar 

  49. Lane PJ, Lubatkin M (1998) Relative absorptive capacity and interorganizational learning. Strateg Manag J 19(5):461

    Article  Google Scholar 

  50. Lane PJ, Salk JE, Lyles MA (2001) Absorptive capacity, learning, and performance in international joint ventures. Strateg Manag J 22(12):1139–1161. doi:10.1002/smj.206

    Article  Google Scholar 

  51. Lavie D (2006) The competitive advantage of interconnected firms: an extension of the resource-based view. Acad Manag Rev 31(3):638–658

    Article  Google Scholar 

  52. Lev S, Fiegenbaum A, Shoham A (2009) Managing absorptive capacity stocks to improve performance: empirical evidence from the turbulent environment of Israeli hospitals. Eur Manag J 27(1):13–25. doi:10.1016/j.emj.2008.04.001

    Article  Google Scholar 

  53. Liao J, Welsch H, Stoica M (2003) Organizational absorptive capacity and responsiveness: an empirical investigation of growth-oriented SMEs. Enterp Theory Pract 28(1):63–85. doi:10.1111/1540-8520.00032

    Article  Google Scholar 

  54. Liu X, White RS (1997) The relative contributions of foreign technology and domestic inputs to innovation in Chinese. Technovation 17(3):119

    Article  Google Scholar 

  55. Luo Y (1997) Partner selection and venturing success: the case of joint ventures with firms in the People’s Republic of China. Organ Sci 8(6):648–662

    Article  Google Scholar 

  56. Mangematin V, Nesta L (1999) What kind of knowledge can a firm absorb? Int J Technol Manag 18(3/4):149

    Article  Google Scholar 

  57. Matusik SF, Heeley MB (2005) Absorptive capacity in the software industry: identifying dimensions that affect knowledge and knowledge creation activities. J Manag 31(4):549–572

    Article  Google Scholar 

  58. McGahan AM, Porter ME (1997) How much does industry matter, really? Strateg Manag J 18:15–30

    Article  Google Scholar 

  59. Miles I (2008) Patterns of innovation in service industries. IBM System Journal 47(1):115–128. doi:10.1147/sj.471.0115

    Article  Google Scholar 

  60. Mowery DC, Oxley JE, Silverman BS (1996) Strategic alliances and interfirm knowledge transfer. Strateg Manag J 17:77–91

    Google Scholar 

  61. Murovec N, Prodan I (2009) Absorptive capacity, its determinants, and influence on innovation output: cross-cultural validation of the structural model. Technovation 29(12):859–872. doi:10.1016/j.technovation.2009.05.010

    Article  Google Scholar 

  62. Neely A (2007) Servitization of manufacturing: an analysis of global trends. Ankara, Turkey

  63. Nicholls-Nixon CL, Woo CY (2003) Technology sourcing and output of established firms in a regime of encompassing technological change. Strateg Manag J 24(7):651. doi:10.1002/smj.329

    Article  Google Scholar 

  64. Nieto M, Quevedo P (2005) Absorptive capacity, technological opportunity, knowledge spillovers, and innovative effort. Technovation 25:1141–1157

    Article  Google Scholar 

  65. Penner-Hahn J, Shaver JM (2005) Does international research and development increase patent output? An analysis of Japanese pharmaceutical firms. Strateg Manag J 26(2):121–140. doi:10.1002/smj.436

    Article  Google Scholar 

  66. Phene A, Fladmoe-Lindquist K, Marsh L (2006) Breakthrough innovations in the U.S. biotechnology industry: the effects of technological space and geographic origin. Strateg Manag J 27(4):369–388

    Article  Google Scholar 

  67. RAE_Rating (2009) Journal ranking list for business and management

  68. Rothaermel FT, Alexandre MT (2009) Ambidexterity in technology sourcing: the moderating role of absorptive capacity. Organ Sci 20(4):759–780

    Article  Google Scholar 

  69. Rumelt RP (1991) How much does industry matter? Strateg Manag J 12(3):167–185

    Article  Google Scholar 

  70. Rust R, Miu C (2006) What academic research tells us about service. Commun ACM 49(7):49–54

    Article  Google Scholar 

  71. Salter A, Tether BS (2006) Innovation in services: through the looking glass of innovation studies (vol. April 7, 2006): background paper for Advanced Institute of Management (AIM) Research’s Grand Challenge on Services Science

  72. Schmalensee R (1985) Do markets differ much? Am Econ Rev 75(3):341–351

    Google Scholar 

  73. Schmidt T (2010) Absorptive capacity—one size fits all? A firm-level analysis of absorptive capacity for different kinds of knowledge. Manag Decis Econ 31(1):1–18. doi:10.1002/mde.1423

    Google Scholar 

  74. Small_Business_Administration (2009) Office of advocacy: frequent asked question. http://www.sba.gov/advo/stats/sbfaq.pdf. Accessed 14 January 2010

  75. Stock GN, Greis NP, Fischer WA (2001) Absorptive capacity and new product development. J High Technol Manag Res 12(1):77

    Article  Google Scholar 

  76. Stroup D, Berlin J, Morton S, Olkin I, Williamson G, Rennie D et al (2000) Meta-analysis of observational studies in epidemiology: a proposal for reporting. JAMA 283(15):2008

    Article  Google Scholar 

  77. Sun PYT, Anderson MH (2010) An examination of the relationship between absorptive capacity and organizational learning, and a proposed integration. Int J Manag Rev 12(2):130–150. doi:10.1111/j.1468-2370.2008.00256.x

    Article  Google Scholar 

  78. Szulanski G (1996) Exploring internal stickiness: impediments to the transfer of best practice within the firm. Strateg Manag J 17:27–43

    Google Scholar 

  79. Thomson_Reuters (2009) Journals ranked by impact: management, April 2009. http://sciencewatch.com/dr/sci/09/apr12-09_2/. Accessed 9 January 2010

  80. Todorova G, Durisin B (2007) Absorptive capacity: valuing a reconceptualization. Acad Manag Rev 32(3):774–786

    Article  Google Scholar 

  81. Tu Q, Vonderembse MA, Ragu-Nathan TS, Sharkey TW (2006) Absorptive capacity: enhancing the assimilation of time-based manufacturing practices. J Oper Manag 24(5):692–710. doi:10.1016/j.jom.2005.05.004

    Article  Google Scholar 

  82. U.S._Department_of_Commerce Bureau of Economic Analysis. http://www.bea.gov/. Accessed 25 November 2009

  83. Van Ark B, Broersma L, den Hertog P (2003) Service innovation, performance and policy: a review. Research Series 6. Ministry of Economic Affairs, The Hague

  84. Van Den Bosch FAJ, Volberda HW, De Boer M (1999) Coevolution of firm absorptive capacity and knowledge environment: organizational forms and combinative capabilities. Organ Sci 10(5):551–568

    Article  Google Scholar 

  85. Vargo SL, Lusch RF (2004) Evolving to a new dominant logic for marketing. J Mark 68(1):1–17

    Article  Google Scholar 

  86. Vargo SL, Lusch RF (2008) Service-dominant logic: continuing the evolution. J Acad Mark Sci 36(1):1–10

    Article  Google Scholar 

  87. Vargo SL, Lusch RF (2008) Why “service”? J Acad Mark Sci 36(1):25–38

    Article  Google Scholar 

  88. Vega-Jurado J, Gutiérrez-Gracia A, Fernández-de-Lucio I (2008) Analyzing the determinants of firm’s absorptive capacity: beyond R&D. R&D Manag 38(4):392–405. doi:10.1111/j.1467-9310.2008.00525.x

    Article  Google Scholar 

  89. Veugelers R (1997) Internal R&D expenditures and external technology sourcing. Res Policy 26(3):303

    Article  Google Scholar 

  90. Wernerfelt B (1984) A resource-based view of the firm. Strateg Manag J 5(2):171–180

    Article  Google Scholar 

  91. Zahra SA, Filatotchev I, Wright M (2009) How do threshold firms sustain corporate entrepreneurship? The role of boards and absorptive capacity. J Bus Ventur 24(3):248–260. doi:10.1016/j.jbusvent.2008.09.001

    Article  Google Scholar 

  92. Zahra SA, George G (2002) Absorptive capacity: a review, reconceptualization, and extension. Acad Manag Rev 27(2):185–203

    Google Scholar 

  93. Zahra SA, Hayton JC (2008) The effect of international venturing on firm performance: the moderating influence of absorptive capacity. J Bus Ventur 23(2):195–220. doi:10.1016/j.jbusvent.2007.01.001

    Article  Google Scholar 

  94. Zhao Z, Anand J (2009) A multilevel perspective on knowledge transfer: evidence from the Chinese automotive industry. Strateg Manag J 30(9):959–983

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Bertha Jimenez.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Jimenez, B., Angelov, B. & Rao, B. Service Absorptive Capacity: Its Evolution and Implications for Innovation. J Knowl Econ 3, 142–163 (2012). https://doi.org/10.1007/s13132-011-0078-z

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s13132-011-0078-z

Keywords

Navigation