Title: Innovation reliability and variability strategies: the importance of absorptive capacity to systemic outcomes

Authors: José Pinheiro; Luís Filipe Lages; Álvaro Dias; Graça Miranda Silva; Miguel T. Preto

Addresses: Renova SA, Torres Novas, 2354-001, Portugal ' Nova School of Business and Economics, Universidade Nova de Lisboa, Office D231, Santander Building, Rua da Holanda, n.1, 2775-405 Carcavelos, Cascais, Portugal ' Tourism Department, Universidade Lusófona/TRIE, Campo Grande, 376, 1749-024 Lisbon, Portugal and ISCTE, Lisbon, Portugal ORCID: 0000-0003-4074-1586 ' ADVANCE/CSG, ISEG, Lisbon School of Economics and Management, Universidade de Lisboa, Rua Miguel Lupi nº 20, 1249-078 Lisbon, Portugal ORCID: 0000-0001-5396-395X ' Instituto Superior Técnico, Universidade de Lisboa, Av. Rovisco Pais, 1049-001 Lisbon, Portugal

Abstract: The role of absorptive capacity (AC) has been widely recognised in the innovation literature. This study examines the predictive role of AC for business performance, and evaluates the mediation of market orientation (responsive-proactive) and innovation competences orientation (exploitation-exploration) in that relationship. The findings show that innovation competence orientations are more important to business performance than market orientations and that innovation competences are better enhanced by AC than by market orientations. AC is not only confirmed as an antecedent of ambidextrous market and innovation competence orientation, but it also helps directly and indirectly to explain business performance. Responsive market orientation (REMKTOR) and innovation competence orientation mediate the positive relationship between AC and business performance. The intensity and significance of the indirect effects reveal the specific knowledge-transformative roles of market and innovation competences orientations. Firms seem to mitigate uncertainty by adjusting their preferences toward less risky innovation strategies.

Keywords: absorptive capacity; market orientation; innovation competences orientation; business performance; explorative innovation; exploitative innovation.

DOI: 10.1504/IJKBD.2020.115028

International Journal of Knowledge-Based Development, 2020 Vol.11 No.4, pp.308 - 337

Received: 14 Oct 2019
Accepted: 27 Sep 2020

Published online: 10 May 2021 *

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