An empirical study of firms’ absorptive capacity and export diversification

The purpose of this paper is to study the firms’ internal knowledge in combination with the external knowledge diversity in their region to examine their joint relation to export diversification. Using a data set of the full population of Swedish manufacturing exporters for the period 2003-2013, allows for identifying when firms introduce new products on the export market. The results indicate that firms in the medium-high tech and the medium-low tech manufacturing sectors only benefit from a larger external knowledge diversity if they themselves have some internal knowledge increasing their absorptive capacity. Changing spatial scale or increasing the time lag yields mostly the same results, but extending the external knowledge diversity to include all types of education subjects does not. This further supports the suggested importance of an absorptive capacity to facilitate the acquisition, assimilation and usage of related external knowledge in producing new products.