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

Zaheer Khan*, Yong Kyu Lew, Svetla Marinova

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

29 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
Pages (from-to)499-512
Number of pages14
JournalInternational Business Review
Volume28
Issue number3
Early online date6 Dec 2018
DOIs
Publication statusPublished - Jun 2019

Keywords

  • Automotive parts industry
  • Exploitative innovation
  • Exploratory innovation
  • Knowledge transfer
  • Learning intent
  • Organizational learning
  • Potential absorptive capacity
  • Quantitative methods
  • Realized absorptive capacity

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