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The Effects of Absorptive Capacity on Innovation Performance: A Cross-Country Perspective

Harris, R; Krenz, A; Moffat, J

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Authors

A Krenz



Abstract

This paper has two objectives: the construction of enterprise‐level estimates of absorptive capacity to allow comparison of absorptive capacity levels across Europe and the analysis of whether the effects of absorptive capacity on R&D and innovation vary across countries. The dataset is the Community Innovation Survey which provides information on the innovation activities of enterprises across Europe. Estimates of absorptive capacity are generated using a structural equation model that considers absorptive capacity to be a latent variable that predicts the use of information sources and cooperation partners for innovation activities. The effects of absorptive capacity are estimated econometrically using probit models. The results show that absorptive capacity levels vary substantially across European countries with Western European enterprises (particularly those in Germany) generally having higher absorptive capacity than Eastern European enterprises (especially Romanian enterprises). The effects of absorptive capacity on R&D and innovation are uniformly positive but also demonstrate substantial heterogeneity across countries. This has important implications for policy as it suggests that, not only should government aim to enhance levels of absorptive capacity but it should also attempt to enhance the value of external knowledge available for enterprises to exploit.

Citation

Harris, R., Krenz, A., & Moffat, J. (2021). The Effects of Absorptive Capacity on Innovation Performance: A Cross-Country Perspective. Journal of Common Market Studies, 59(3), 589-607. https://doi.org/10.1111/jcms.13108

Journal Article Type Article
Acceptance Date May 26, 2020
Online Publication Date Sep 21, 2020
Publication Date 2021-05
Deposit Date Jun 5, 2020
Publicly Available Date Mar 29, 2024
Journal JCMS: Journal of Common Market Studies
Print ISSN 0021-9886
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 59
Issue 3
Pages 589-607
DOI https://doi.org/10.1111/jcms.13108
Public URL https://durham-repository.worktribe.com/output/1269387

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Publisher Licence URL
http://creativecommons.org/licenses/by/4.0/

Copyright Statement
© 2020 The Authors. JCMS: Journal of Common Market Studies published by University Association for Contemporary European Studies and John Wiley & Sons Ltd

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.




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