Unpacking absorptive capacity: when some of its dimensions are more relevant than others

To be effective in enhancing innovation performance, absorbing external knowledge enables firms to identify new technologies and apply the acquired technological knowledge appropriately and successfully in the creation of new solutions to customer needs. The notion of absorptive capacity (ACAP) with its multidimensional nature considers these aspects. Contributing to a thorough understanding of ACAP, this paper provides important insights into the underlying processes and dimensions of ACAP and their dependence on the nature of the environment in which firms operate. This study also investigates proactive MO as an important antecedent of the underlying processes of ACAP. Overall, the findings suggest enhanced innovation performance results from a proactive orientation towards markets that motivates and guides the absorption of technological knowledge that is valuable for developing effective customer solutions. Notably, the level of environmental turbulence changes the relevance of some ACAP dimensions for enhancing innovation performance.