Exploitative and exploratory innovations in emerging economies: The role of realized absorptive capacity and learning intent

Zaheer Khan, Yong Kyu Lew, Svetla Trifonova Marinova

Research output: Contribution to journalJournal articleResearchpeer-review

2 Citations (Scopus)

Abstract

This paper investigates the mediating effect of learning intent in transforming local suppliers’ potential absorptive capacity into realized absorptive capacity and its impact on exploitative and exploratory innovation. Using survey data
from 155 auto parts manufacturers in Pakistan, we find that local firms’ realized absorptive capacity enables them to develop both exploitative and exploratory innovations. The findings further suggest that local suppliers’ learning intent
mediates the relationship between potential and realized absorptive capacity which in turn lead to both types of innovation. In the context of the emerging economy of Pakistan, local suppliers’ absorptive capacity is found to be critically important in spurring exploitative and exploratory innovation, but learning intent enables realized absorptive capacity and thus in conjunction with realized absorptive capacity supports innovation. Consequently, there would be a strong case for policy intervention to assist emerging economy firms in building their absorptive capacity and strengthening their learning intent as a route for promoting innovation and improving their value added position in the
global value chains of multinational enterprises.
Original languageEnglish
JournalInternational Business Review
Volume28
Issue number3
Pages (from-to)499-512
ISSN0969-5931
DOIs
Publication statusPublished - 2019

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Innovation
Absorptive capacity
Emerging economies
Local suppliers
Pakistan
Mediating effect
Multinational enterprises
Policy intervention
Value added
Value chain

Keywords

  • potential absorptive capacity; realized absorptive capacity; learning intent; exploratory innovation; exploitative innovation; knowledge transfer; automotive parts industry

Cite this

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title = "Exploitative and exploratory innovations in emerging economies: The role of realized absorptive capacity and learning intent",
abstract = "This paper investigates the mediating effect of learning intent in transforming local suppliers’ potential absorptive capacity into realized absorptive capacity and its impact on exploitative and exploratory innovation. Using survey datafrom 155 auto parts manufacturers in Pakistan, we find that local firms’ realized absorptive capacity enables them to develop both exploitative and exploratory innovations. The findings further suggest that local suppliers’ learning intentmediates the relationship between potential and realized absorptive capacity which in turn lead to both types of innovation. In the context of the emerging economy of Pakistan, local suppliers’ absorptive capacity is found to be critically important in spurring exploitative and exploratory innovation, but learning intent enables realized absorptive capacity and thus in conjunction with realized absorptive capacity supports innovation. Consequently, there would be a strong case for policy intervention to assist emerging economy firms in building their absorptive capacity and strengthening their learning intent as a route for promoting innovation and improving their value added position in theglobal value chains of multinational enterprises.",
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Exploitative and exploratory innovations in emerging economies: The role of realized absorptive capacity and learning intent. / Khan, Zaheer; Lew, Yong Kyu ; Marinova, Svetla Trifonova.

In: International Business Review, Vol. 28, No. 3, 2019, p. 499-512.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

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AU - Lew, Yong Kyu

AU - Marinova, Svetla Trifonova

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AB - This paper investigates the mediating effect of learning intent in transforming local suppliers’ potential absorptive capacity into realized absorptive capacity and its impact on exploitative and exploratory innovation. Using survey datafrom 155 auto parts manufacturers in Pakistan, we find that local firms’ realized absorptive capacity enables them to develop both exploitative and exploratory innovations. The findings further suggest that local suppliers’ learning intentmediates the relationship between potential and realized absorptive capacity which in turn lead to both types of innovation. In the context of the emerging economy of Pakistan, local suppliers’ absorptive capacity is found to be critically important in spurring exploitative and exploratory innovation, but learning intent enables realized absorptive capacity and thus in conjunction with realized absorptive capacity supports innovation. Consequently, there would be a strong case for policy intervention to assist emerging economy firms in building their absorptive capacity and strengthening their learning intent as a route for promoting innovation and improving their value added position in theglobal value chains of multinational enterprises.

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