Absorptive capacity, as defined by cohen and levinthal, 1989, cohen and levinthal, 1990, cohen and levinthal, 1994, is a firms ability to recognize the value of new, external information, assimilate it, and apply it to commercial ends 1990, p. Absorptive capacity was introduced by cohen and levinthal in 1990. Zahra georgia state university gerard george university of wisconsinmadison researchers have used the absorptive capacity construct to explain various organizational phenomena. Absorptive capacity is more likely to be developed and maintained as a byproduct of routine. Absorptive capacity acap was first described in academic literature in the fields of management and organizational science as a construct for consideration at the organizational level by cohen and levinthal. Absorptive capacity, the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. Building on the work of cohen and levinthal, 1989, cohen and levinthal, 1990, researchers have shown that acap influences innovation, business performance, intraorganizational transfer of knowledge gupta and govindarajan, 2000. First, trust between an ijvs parents and the ijvs relative absorptive capacity with its foreign parent are suggested to influence its ability to understand new. This paper proposes and tests a model of ijv learning and performance that segments absorptive capacity into the three components originally proposed by cohen and levinthal 1990. We argue that the development of absorptive capacity, and, in turn. Moreover, cohen and levinthal s works suggest that the ability of companies to absorb external knowhow could be. Absorptive capacity is a firms ability to recognize the value of new, external information, assimilate it, and apply it to commercial ends.
Since cohen and levinthals seminal work, many empirical and theoretical studies have explored the concept of absorptive capacity from the perspective of. Despite this notion, research in absorptive capacity has focused on organizational level and defined absorptive capacity as an organizational level. Absorptive capacity as been defined as firms ability to value, assimilate, and apply new knowledge cohen and levinthal 1990. Absorptive capacity refers to the ability to locate new ideas and to incorporate them into an organizations processes, and this is widely seen as a major contributor to organizational performance cohen and levinthal, 1990. Despite the strategic importance of absorptive capacity, its origins remain only partially understood. The original construct was introduced by cohen and levinthal in 1989. Cohen and levinthal define absorptive capacity as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends 9, p. Pdf cohen and levinthal 1990 absorptive capacity a new. In this process of innovation, imitation is important which can be a capacity that is acquired from external environment. For them, absorptive capacity depends greatly on prior related knowledge and diversity of background. Therefore, it is possible that the absorptive capacity of a firm is created as a byproduct of the. Since the publication of cohen and levinthal s 1989 work on absorptive capacity, numerous theoretical and empirical studies have analysed firms capacity to absorb knowledge. Organizational ambidexterity and absorptive capacity. The organizational and geographic drivers of absorptive.
In their seminal article, cohen and levinthal 1990, p. Although, cohen and levinthal view of absorptive capacity is not. Multilevel absorptive capacity and interorganizational new. Almost half of the 98 papers use absorptive capacity as theoretical support, and the remaining papers use absorptive capacity in the research model percent of papers or as a theoretical base 5 per cent of papers. Nonaka and takeuchi, 1995, leading to increased capacity for absorption. The purpose of this perspective paper is to advance understanding of absorptive capacity, its underlying dimensions, its multilevel antecedents, its impact on firm performance and the contextual factors that affect absorptive capacity. Cohen and levinthal 1989,1990 assigned the term absorptive capacity to the general capability of individuals, groups, and firms to recognize the value of new information, choose what to adopt, and apply it to innovation. Absorptive capacity is defined as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends cohen and levinthal 1990, p. Absorptive capacity is the ability to recognize the value of new information, to assimilate and to.
We would like to show you a description here but the site wont allow us. One year later, cohen and levinthal 1990 redefine the construct as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends in their paper, the authors provide three main aspects of absorptive capacity which help to better understand the construct. Pdf in this paper, we argue that the ability of a firm to recognize the. The objective of this paper is to deepen our understanding of the role of absorptive capacity in enabling interorganizational new product development inpd. Absorptive capacity is the ability to recognize the value of external knowledge for personal development cohen and levinthal, 1990. Knowledge flows and the absorptive capacity of regions. This paper introduces the concept or theory of absorptive capacity ac which the authors define as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends. Levintbal university of pennsylvania in this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commerciai ends is critical to its innovative capabilities.
Thirtyseven percent of the studies 37 papers use cohen and levinthal as a minor citation. Since the cohen and levinthal article on absorptive capacity was published, the ability to recognize the value of new information, to assimilate it, and apply it to commercial ends p. Absorptive capacity, technological innovation, and. Absorptive capacity is a firms ability to identify valuable external knowledge, assimilate or transform this knowledge into the firms knowledge base, and apply this new knowledge through innovation and competitive actions cohen and levinthal 1990. The firms absorptive capacity enables not only to exploit new external knowledge but also. The concept of the absorptive capacity was formalized in macroeconomics and it was used to define the economic ability to absorb and use external information and resources adler, 1965. The role of individual absorptive capacity, subjective. In this paper we aim to study such learning under the lens of absorptive capacity. However, this definition of the construct suggests that a firm has an equal capacity. Absorptive capacity constituents in knowledgeintensive. Levinthal university of pennsylvania in this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative. Conceptually, it is similar to information processing theory, but at the firm level rather than the individual level.
Cohen and levinthal 1989 adjusted this concept and defined absorptive capacity as an ability of an individual or an organization. How individuals engage in the absorption of new external. Over the last two decades, the concept of absorptive capacity acap has received considerable attention in the literature. A new perspective on learning and innovation wesley m. Organizational learning and absorptive capacity in. The concept of absorptive capacity concept has emerged as an underlying. Much of the prior research on interorganizational learning has focused on the role of absorptive capacity, a firms ability to value, assimilate, and utilize new external knowledge. Model of absorptive capacity and implementation of new technology for rural construction smes e. Thus, absorptive capacity is the mechanism that makes external knowledge available to. Essential to the concept of absorptive capacity is the. At a more aggregated level, firms absorptive capacities determine the overall absorptive capacity of geographical areas, such as regions.
Developing and maintaining absorptive capacity is vital to a firms longterm survival and. Building on cohen and levinthals 1990 contention that the absorption of external knowledge in a given. Absorptive capacity, technological innovation, and product. A new perspective on learning and innovation, asq, 35 1990, 128152. The absorptive capacity will support the company in exploring the external element. Nineteen years after the cohen and levinthal 1990 paper, the field is. Cohen and levinthal 1990 absorptive capacity a new perspective on learning and innovation administrative science quarterly volume 35 issue 1 pg 128 152. Put another way, absorptive capacity is a limit to the rate or quantity of scientific or technological information that a firm can absorb. In addition, it is argued that the ability to evaluate and use outside knowledge is largely a function of the level of prior related knowledgei.
Cohen and levinthal 1990 explicates that the absorptive capacity tends to develop cumulatively and pathdependently, building on existing knowledge. Critical analysis of the use of absorptive capacity theory. An organization with substantial absorptive capacity, they argued, is. Unfortunately, more than two decades after the publication of cohen and levinthals landmark piece on absorptive capacity. We contend that despite what is known about the benefits of absorptive capacity to innovating firms, this research is dominated by firmlevel analyses using crosssectional data. Discusses the notion that the ability to exploit external knowledge is crucial to a firms innovative capabilities. Levinthal university of pennsylvania in this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities.
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