An exploratory analysis of the relationship between absorptive capacity and business strategy

Abstract

In this study, we argue that a firm's absorptive capacity will vary depending on the strategy it adopts. To examine this, based on the fact that absorptive capacity is developed through the ability to acquire, assimilate, transform and exploit externally-generated knowledge, we look at the importance of each of these dimensions at firms pursuing different business strategies. To reflect business strategy, we draw on Miles and Snow's typology. The information has been obtained based on a sample made up of 81 Spanish small and medium-sized enterprises. Results show that knowledge acquisition capacity is greater at prospectors than at defenders and analysers, and that transformation and exploitation capacities are greater at prospectors than at defenders. No differences in knowledge assimilation capacity are observed.

Keywords:

• potential absorptive capacity
• realised absorptive capacity
• business strategy

Acknowledgements

This research has been carried out with financial support from the Spanish Ministry of Science and Technology through project ECO2011-29201.