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Title: Absorptive capacity in high-technology markets: The competitive advantage of the haves
Authors: Narasimhan, O.
Rajiv, S. 
Dutta, S.
Keywords: Absorptive capacity
Dynamic capabilities
High-technology markets
Knowledge acquisition
Marketing capability
Organizational learning
Resource-based view
Issue Date: 2006
Citation: Narasimhan, O., Rajiv, S., Dutta, S. (2006). Absorptive capacity in high-technology markets: The competitive advantage of the haves. Marketing Science 25 (5) : 510-524. ScholarBank@NUS Repository.
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. ©2006 INFORMS.
Source Title: Marketing Science
ISSN: 07322399
DOI: 10.1287/mksc.1060.0219
Appears in Collections:Staff Publications

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