An analytical model of absorptive capacity

This article presents a new model for analyzing determinants of absorptive capacity in companies and shows how can be operacionalized. We propose that absorptive capacity is not only determined by R&D activities but also by a set of internal factors, which we group into three basic categories: organizational knowledge, formalization, and social integration mechanisms. We pilot our model on a sample of 84 small and medium-sized enterprises (SMEs) located in the province of Valencia, Spain. The results of our pilot study suggest that the model specification is useful to explain the determinants of firm's absorptive capacity. In addition, our findings show that the determinants of absorptive capacity differ with respect to the applicability of knowledge absorbed and that R&D activities have two different effects. Greater investment in R&D promotes the exploitation of external knowledge, regardless of its nature, while sustained R&D activities over time are a decisive factor for the exploitation of scientific knowledge.