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Absorptive Capacity- One size fits all?

Absorptive Capacity- One size fits all?. A Firm-level analysis of absorptive capacity for different kinds of knowledge. ZEW Discussion Paper No. 05-72 Tobias Schmidt Centre for European Economic Research (ZEW) Tel.: +49-621-1235-235, schmidt@zew.de. Motivation.

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Absorptive Capacity- One size fits all?

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  1. Absorptive Capacity- One size fits all? A Firm-level analysis of absorptive capacity for different kinds of knowledge. ZEW Discussion Paper No. 05-72 Tobias Schmidt Centre for European Economic Research (ZEW) Tel.: +49-621-1235-235, schmidt@zew.de

  2. Motivation • Little research on the determinants and mechanisms that increase absorptive capacity Mahnke et al. 2005; Lane et al. 2002; Veugelers 1997 • Problem to find good empirical measure of absorptive capacity Zahara and George, 2002; Becker and Peters 2000 • Same absorptive capacity for all types of knowledge?

  3. Definition of Absorptive Capacity • AC: Firms’ ability to “identify, assimilate, and exploit knowledge from the environment” Cohen and Levinthal 1989, 1990 • Concept is used at the individual-, organizational-, regional-, and national-level Narula 2004; Van den Bosch 2003 • Used in economics and business administration Belderbos et al. 2004; Lenox and King 2004

  4. Determinants of Absorptive Capacity: R&D Activities • R&D intensity and R&D budgets intensity: Cohen and Levinthal 1989; Stock et al. 2001; Rocha 1999; Cantner and Pyka 1998; budgets: Leahy and Neary 2004 ; Grünfeld 2003 • Continuous R&D activitiesOltra and Flor 2003; Becker and Peters 2000 • R&D labBecker and Peters 2000; Veugelers 1997

  5. Determinants of Absorptive Capacity: Prior Related Knowledge/Skills • Absorptive capacity is path dependentCohen and Levinthal 1990 • Employees’ level of education Rothwell and Dodgson 1991 • GatekeepersGradwell 2003; Vinding 2000

  6. Determinants of Absorptive Capacity: Organization and HRM • Organizational structure Gradwell 2003; Welsch et al. 2001; Van den Bosch al. 1999; Lane and Lubatkin 1998 • Human Resource and Knowledge Management Mahnke et al. 2005; Jones and Craven 2001; Vinding 2000; Cohen and Levinthal 1994 • Involvement of managers Lenox and King 2004

  7. Absorptive Capacity for Different Knowledge • Learning depends on the similarity between “teacher” and “student”Lane and Lubatkin 1998 • Prior experience and related knowledgeDussauge et al. 2000; Cohen and Levinthal 1990 • Scientific knowledgeBecker and Peters 2000; Nelson and Wolff 1997

  8. Data: Mannheim Innovationpanel • Survey of the innovation behavior of German firms conducted by the ZEW on behalf of the ministry for education and research (BMBF) • Enterprises with 5 or more employees in • Manufacturing (since 1993) • Service Sector (since 1996) • Mannheim Innovationpanel (MIP) 2003 • Innovation activities during the period 2000 – 2002 • Comparable to CIS III • Responses from about 4,500 enterprises • Responses from about 2,100 innovators

  9. Empirical Model: Dependent Variables • Three types of absorptive capacity (AC): • AC for knowledge from own industry (NACE2) • AC for knowledge from other industries (NACE2) • AC for knowledge from universities or other public research institutes • Construction: Question on contribution of external actors to innovations => Focus on “exploitation” component of AC.

  10. Independent Variables: R&D and Skills • R&D activities: • Continuous R&D (dummy) • R&D intensity, R&D intensity squared • Prior related knowledge/Skills: • Continuous R&D (dummy) • Share of employees with higher education

  11. Independent Variables: Organization and HRM • Stimulation of innovation activities and knowledge sharing (index, factor analysis) • Collaboration between departments on innovation projects (dummies): • Informal contacts between employees • Open communication of ideas and concepts • Joint strategy development • Mutual support with problems • Meetings between heads of departments • Temporary exchange of personnel • Seminars and workshops involving several departments

  12. Independent Variables: Control Variables • Size (number of employees) • Situated in East Germany (dummy) • Industry groups (6 dummies): • Other manufacturing (reference group) • Low-tech industries • Medium-low-tech industries • Medium-high-tech industries • High-tech industries • Low-tech services • High-tech services

  13. 1. Probit Estimation 2. Triprobit (GHK-Simulator)

  14. Conclusion • R&D and Skills plays an important role in determining AC • Stimulation of innovation activities and knowledge sharing is important for AC • Factors contribute differently to AC for different kinds of knowledge • Intra-industry knowledge requires experience rather than R&D • Further research on different types of AC necessary • Proxies for AC should be chosen with respect to the knowledge to be acquired.

  15. Absorptive Capacity- One size fits all? A Firm-level analysis of absorptive capacity for different kinds of knowledge. ZEW Discussion Paper No. 05-72 Tobias Schmidt Centre for European Economic Research (ZEW) Tel.: +49-621-1235-235, schmidt@zew.de

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