Narasimhan, Om 
ORCID: 0000-0001-8027-8800, Rajiv, Surendra and Dutta, Shantanu
(2006)
Absorptive capacity in high-technology markets: the competitive advantage of the haves.
Marketing Science, 25 (5).
pp. 510-524.
ISSN 0732-2399
Abstract
The rapid rate of knowledge obsolescence in many high-technology markets makes it imperative for firms to renew their technological bases constantly. Given its critical importance, excellence in renewal of technological base would serve as a dynamic capability. Drawing on past literature, we identify this dynamic capability associated with acquiring and utilizing external technological know-how with the notion of absorptive capacity (AC). We ask the following questions: (a) What would cause some firms to have a higher AC than others? and, (b) What is the impact of AC on a firm’s profitability? We build a conceptual framework suggesting that marketing, R&D, and operations capabilities have a significant positive impact on a firm’s AC. We test our framework on a data set of firms in high-technology markets. Using an econometric technique called stochastic frontier estimation, we infer the AC of firms from an observation of the know-how they actually absorb. We find that firm-specific capabilities significantly impact AC. Also, we find that AC has a significant impact on profitability and that this impact is moderated by the pace of technological change: the greater the pace of change, the greater the impact.
| Item Type: | Article |
|---|---|
| Official URL: | http://mktsci.journal.informs.org/ |
| Additional Information: | © 2006 INFORMS |
| Divisions: | Management |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management |
| Date Deposited: | 29 Oct 2012 14:00 |
| Last Modified: | 11 Dec 2024 23:05 |
| URI: | http://eprints.lse.ac.uk/id/eprint/47114 |
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