Technology Analysis & Strategic Management

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Absorptive capacity, knowledge sharing, and

innovative behaviour of R&D employees

Minhyung Kang & Mi-Jung Lee

To cite this article: Minhyung Kang & Mi-Jung Lee (2016): Absorptive capacity, knowledge
sharing, and innovative behaviour of R&D employees, Technology Analysis & Strategic
Management, DOI: 10.1080/09537325.2016.1211265

To link to this article: http://dx.doi.org/10.1080/09537325.2016.1211265

Published online: 26 Jul 2016.

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 TECHNOLOGY ANALYSIS & STRATEGIC MANAGEMENT, 2016
http://dx.doi.org/10.1080/09537325.2016.1211265

Absorptive capacity, knowledge sharing, and innovative

behaviour of R&D employees
Minhyung Kanga and Mi-Jung Leeb
a
Department of Advanced Industry Fusion, Konkuk University, Seoul, South Korea; bLStone, Inc., Seoul, South Korea

ABSTRACT ARTICLE HISTORY

This study explores the interrelationship between absorptive capacity and Received 19 August 2015
knowledge sharing, which are innovation-specific antecedents of Revised 9 May 2016
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innovative behaviour. By differentiating the two sub-dimensions of Accepted 1 July 2016

absorptive capacity, potential and realised absorptive capacity, previous
KEYWORDS
contradictory findings on the relationship between absorptive capacity Absorptive capacity;
and knowledge sharing are reconciled. To verify the research knowledge sharing;
hypotheses, the survey responses from 138 R&D employees of a innovative behaviour;
multinational electronics company are analysed through structural individual-level
equation modelling. The results show that both sub-dimensions of
absorptive capacity directly influence innovative behaviour. However,
knowledge sharing’s effect on innovative behaviour is indirect through
realised absorptive capacity. The research findings imply employees’
absorptive capacity and knowledge sharing among them should be
nurtured simultaneously to facilitate innovative behaviour. In addition to
providing employees with many opportunities to be exposed to external
knowledge, internal communications among employees and exploratory
trials exploiting external knowledge along with internal knowledge
should be encouraged.

Introduction
Innovation is one of the most critical factors for firms’ long-term survival (Ancona and Caldwell 1987;
Scott and Bruce 1994). Product innovation differentiates a firm’s offerings in the market and allows it
to maximise margins through premium pricing, for example, Apple Inc. (Schumpeter 1934). In
addition, process innovation enhances the efficiency of business processes and helps a firm
achieve cost leadership, for example, Toyota Motor Corp. Thus, a firm that is good at innovation
can gain competitive advantages over its competitors that are not.
Since innovation in firms starts with new ideas generated, adopted, or modified by individual
employees, an understanding of the antecedents of individual innovative behaviour is imperative
(Scott and Bruce 1994). Thus, a variety of antecedents have been suggested by previous research.
These include individual differences such as personality and extrinsic/intrinsic motivation, job charac-
teristics such as complexity, and contextual influences such as leadership (Hammond et al. 2011).
However, most antecedents are not specific to innovative behaviour and can be applied to other indi-
vidual behaviours within a firm, such as organisational citizenship behaviour (Smith, Organ, and Near
1983). This is a limitation of previous research on innovative behaviour implying that more inno-
vation-specific antecedents should be explored.
For example, absorptive capacity facilitates the adoption and use of new external knowledge
(Cohen and Levinthal 1990), which can lead to innovative behaviour. In addition, knowledge

CONTACT Minhyung Kang minhkang@konkuk.ac.kr, woodstck@gmail.com

© 2016 Informa UK Limited, trading as Taylor & Francis Group
 2 M. KANG AND M.-J. LEE

sharing promotes internal knowledge diffusion among employees, and this can also increase inno-
vative behaviour (Radaelli et al. 2014). While both absorptive capacity and knowledge sharing are
suggested to influence innovation, there are conflicting views on the interactions between these con-
structs. Some insist that absorptive capacity increases knowledge sharing (Szulanski 1996; Ko, Kirsch,
and King 2005), while others suggest the opposite (Liao, Fei, and Chen 2007; Oliveira et al. 2015). To
overcome this lack of consensus, the current study examines the interrelationship between absorp-
tive capacity and knowledge sharing, which are innovation-specific antecedents of innovative behav-
iour. On the basis of this examination, we attempt to answer the following research question:
How do the innovation-specific antecedents of innovative behaviour, absorptive capacity and knowledge sharing,
interact with each other?

The remaining part of the paper is organised as follows. First, the theoretical background of the
research is reviewed. Based on the literature review, the research model and hypotheses are devel-
oped. Next, the research methodology and the analysis result are provided. Finally, implications and
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limitations of the research are discussed, and future research directions are suggested.

Theoretical background
Absorptive capacity
Originally, absorptive capacity was defined at an organisational level (Cohen and Levinthal 1989,
1990). However, multiple levels are involved to explain how it develops (Wijk et al. 2011). For instance,
each individual employee within a firm scans the environment, brings external knowledge into the
firm, and then exploits the knowledge to make new products or services (Lane, Koka, and Pathak
2006). These individual-level absorptive capacities of employees will lead to absorptive capacity at
an organisational level (ter Wal, Criscuolo, and Salter 2011).
In addition, absorptive capacity is a multi-dimensional concept. Following the original definition of
absorptive capacity as ‘a firm’s ability to identify, assimilate, and exploit knowledge from the environ-
ment’ (Cohen and Levinthal 1989, 21), subsequent studies have suggested multi-dimensional defi-
nitions of absorptive capacity (Table 1).
Although the number of sub-dimensions of absorptive capacity differs by researcher, sub-
dimensions are typically grouped into two categories. The first category includes the processes by
which a firm can absorb external knowledge from the environment. The second includes the
processes by which the absorbed external knowledge can be used for a specific purpose within a
firm. Zahra and George (2002) named the former ‘potential’ absorptive capacity and the latter
‘realised’ absorptive capacity. Potential absorptive capacity includes the capability to acquire and
assimilate external knowledge, but does not guarantee its application, whereas realised absorptive
capacity means the capability to transform and exploit absorbed knowledge.
Similarly, individual-level absorptive capacity is composed of potential and realised absorptive
capacity (Da Silva and Davis 2011). Each employee’s individual capability to acquire and assimilate
external knowledge collectively leads to an organisation’s potential absorptive capacity. Likewise,

Table 1. Definitions of absorptive capacity.

Authors Definitions Comments
Cohen and ‘a firm’s ability to identify, assimilate, and exploit Originally defined absorptive capacity with
Levinthal (1989, knowledge from the environment’ three sub-dimensions at a firm level
21)
Zahra and George ‘a set of organizational routines and processes by which Extended the original three sub-dimensions of
(2002, 186) firms acquire, assimilate, transform, and exploit absorptive capacity to four dimensions
knowledge’
Todorova and ‘a firm’s ability to value, acquire, assimilate or transform, Defined Zahra and George’s (2002) assimilation
Durisin (2007) and exploit external knowledge’ and transformation as alternative processes
 TECHNOLOGY ANALYSIS & STRATEGIC MANAGEMENT 3

each employee’s individual capability to transform and exploit absorbed knowledge leads to an
organisation’s realised absorptive capacity. Thus, individual-level absorptive capacity has the same
sub-dimensions as organisational-level absorptive capacity.
However, a firm’s absorptive capacity is not just the sum of its employees’ individual-level absorp-
tive capacities; it also depends on knowledge sharing among employees (Cohen and Levinthal 1990).
In particular, each employee’s knowledge internalisation does not guarantee a firm’s knowledge
assimilation (of absorptive capacity). There should also be knowledge sharing among employees.
For example, certain external knowledge absorbed by an employee may not be useful to him or
her directly, even though it is valuable at an organisational level. To use that knowledge within an
organisation, it should be shared and transmitted to another employee (or department) who
needs it. Thus, knowledge sharing among employees is also a critical component of a firm’s absorp-
tive capacity. In short, individual-level absorptive capacities of employees, along with knowledge
sharing among them, determine a firm’s level of absorptive capacity (Cohen and Levinthal 1990).
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Innovative behaviour
At an organisational level, innovation is defined as ‘the development and implementation of new
ideas by people who over time engage in transactions with others within an institutional context’
(Van de Ven 1986, 604). Likewise, individual-level innovation is represented by innovative behaviour,
which includes micro-level innovation processes such as problem recognition, idea generation, build-
ing a coalition of supporters for it, and realising the idea (Kanter 1988; Scott and Bruce 1994).
Many studies have examined the antecedents of an individual’s innovative behaviour such as indi-
vidual factors, job factors, and contextual factors (Hammond et al. 2011). Individual factors include
personality (Oldham and Cummings 1996), education (Amabile 1983), and motivation (George and
Zhou 2002). Job factors include autonomy (Axtell et al. 2000), complexity (Oldham and Cummings
1996), and time pressure (Amabile, Hadley, and Kramer 2002). Contextual factors include climate
for innovation (Scott and Bruce 1994), supervisor support (Basu and Green 1997), and leadership
(Pieterse et al. 2010).
Even though innovative behaviour is defined as that of developing and implementing new ideas,
previously researched antecedents have not included variables from cognitive, organisational learn-
ing, or knowledge management perspectives. Dealing with unfamiliar external ideas requires con-
siderable cognitive capacity and effort. Thus, organisational learning and knowledge
management-related constructs should be considered to be facilitators of innovative behaviour.

Research model and hypotheses

An individual’s absorptive capacity and knowledge sharing among members are critical for organis-
ation-level absorptive capacity, which leads to organisational innovation (Cohen and Levinthal 1990).
Accordingly, our research model attempts to explain how absorptive capacity and knowledge sharing
interact with each other at an individual level and how they influence an individual’s innovative
behaviour. Figure 1 depicts the research model.

Absorptive capacity and innovative behaviour

March and Simon (1958) suggested that most innovations result from borrowing new ideas from the
outside rather than inventing them internally. Therefore, absorptive capacity for adopting and
exploiting new ideas from the outside is critical for firms’ innovation (Cohen and Levinthal 1990).
In a similar vein, employees’ absorptive capacity to adopt and exploit new external ideas within an
organisation can lead to their innovative behaviour. Detailed rationales for both potential and
realised absorptive capacity are provided below.
 4 M. KANG AND M.-J. LEE
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Figure 1. Research model.

Potential absorptive capacity and innovative behaviour

Potential absorptive capacity is the individual’s (or firm’s) capability to acquire and assimilate external
knowledge (Zahra and George 2002). With high potential absorptive capacity, an employee can
access and adopt diverse external knowledge. This diverse external knowledge provides new per-
spectives and insights that are not available within an organisation (Fosfuri and Tribó 2008). Thus,
it triggers the generation of creative ideas, which is one of the main parts of innovative behaviour
(Scott and Bruce 1994). These arguments lead to the first research hypothesis.
H1a. Potential absorptive capacity positively influences innovative behaviour.

Realised absorptive capacity and innovative behaviour

Realised absorptive capacity includes the transformation and exploitation of adopted external knowl-
edge (Zahra and George 2002). An employee able to customise and use external knowledge for
internal purposes can combine external knowledge with internal knowledge to create new ideas.
In addition, realised absorptive capacity can be useful for promoting and implementing new ideas
within an organisation, which is another part of innovative behaviour (Scott and Bruce 1994).
Based on these arguments, the second research hypothesis is suggested.
H1b. Realised absorptive capacity positively influences innovative behaviour.

Knowledge sharing and innovative behaviour

Even employees in the same company do not have identical knowledge. Some knowledge may
overlap, but other knowledge may differ by person. By sharing knowledge among colleagues,
which includes both knowledge donating and knowledge collecting (Cabrera, Collins, and Salgado
2006; de Vries, Van den Hooff, and de Ridder 2006), fragmented knowledge can be combined and
internalised by many employees. This facilitates new idea generation (Heffner and Sharif 2008;
Wang and Wang 2012; Yu, Yu-Fang, and Yu-Cheh 2013; Akhavan and Hosseini 2015). In addition,
when sharing knowledge, the knowledge contributor has to ‘translate’ the knowledge into a form
that is understandable by a recipient (Mura et al. 2013; Radaelli et al. 2014). This experience enhances
 TECHNOLOGY ANALYSIS & STRATEGIC MANAGEMENT 5

the contributor’s capacity to promote and realise new ideas, which are the main elements of innova-
tive behaviour (Kanter 1988; Scott and Bruce 1994). Thus, many scholars have emphasised the role of
knowledge sharing in enhancing innovation (Liebowitz 2002; Lin 2007; Liao, Fei, and Chen 2007). The
third research hypothesis is developed based on these arguments.
H2. Knowledge sharing positively influences innovative behaviour.

Absorptive capacity and knowledge sharing

Absorptive capacity and knowledge sharing are interrelated concepts. Absorptive capacity is the
capacity to adopt and exploit external knowledge, while knowledge sharing is the behaviour of
giving one’s own knowledge and receiving colleagues’ knowledge. There are conflicting views on
the relationship between absorptive capacity and knowledge sharing. Some insist that absorptive
capacity increases knowledge sharing (Szulanski 1996; Ko, Kirsch, and King 2005), while others
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suggest the opposite (Liao, Fei, and Chen 2007; Oliveira et al. 2015). By separating absorptive capacity
into potential and realised absorptive capacity, these theoretical conflicts may be resolved.

Potential absorptive capacity and knowledge sharing

With high potential absorptive capacity, an individual can acquire and assimilate a variety of external
knowledge. This absorbed knowledge can be useful to other colleagues as well as to the individual
him- or herself. The confidence that his or her knowledge can be helpful to others facilitates knowl-
edge sharing (Bock et al. 2005). Accordingly, an individual who absorbs external new knowledge
becomes the knowledge gatekeeper for an organisation (Cranefield and Yoong 2007). In addition,
through the process of assimilating diverse external knowledge, an individual becomes accustomed
to understanding new knowledge framed in different languages or perspectives and learns how to
transfer new knowledge to internal colleagues in a way that they can easily understand (Reagans and
McEvily 2003). This cognitive capability reduces communication costs and leads to more knowledge
sharing. Therefore, the fourth research hypothesis associates potential absorptive capacity and
knowledge sharing.
H3. Potential absorptive capacity positively influences knowledge sharing.

In addition, combining the previous arguments for H2 and H3, knowledge sharing’s mediating role
between potential absorptive capacity and innovative behaviour is suggested. An employee who has
experienced and absorbed a variety of external knowledge (i.e. one that has high potential absorptive
capacity) tends to share more knowledge with colleagues. This knowledge-sharing communication
facilitates a combination of fragmented knowledge within a firm and leads to innovative behaviour.
Hence,
H3-1. Knowledge sharing mediates potential absorptive capacity’s influence on innovative behaviour.

Knowledge sharing and realised absorptive capacity

Knowledge sharing provides opportunities for internalising colleagues’ knowledge as well as one’s
own. With this extended knowledge base, which includes knowledge itself and knowledge about
knowledge sources (i.e. experts) within a firm, an individual can enhance his or her capacity to trans-
form and exploit external ideas (i.e. realised absorptive capacity), accommodating to the firm’s
context. In other words, if an individual gets to know a variety of internal knowledge and knowledge
about internal experts, he or she can exploit that knowledge to use external ideas. Thus, knowledge
sharing increases an individual’s realised absorptive capacity. Based on these arguments, the follow-
ing research hypothesis is suggested.
H4. Knowledge sharing positively influences realised absorptive capacity.
 6 M. KANG AND M.-J. LEE

According to the arguments for H4 and H1b, realised absorptive capacity is expected to mediate
the relationship between knowledge sharing and innovative behaviour. Through knowledge sharing
with colleagues, an employee can access internal knowledge, which is necessary to use external
knowledge. This increases realised absorptive capacity. Furthermore, an employee that has high
realised absorptive capacity can use external knowledge better, resulting in more innovative behav-
iour. Thus,
H4-1. Realised absorptive capacity mediates knowledge sharing’s influence on innovative behaviour.

Methodology
The sample data were gathered by a survey methodology and the research hypotheses were vali-
dated using the partial least squares (PLS) technique.
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Measures
Table 2 summarises the measurement items for each research variable of the model. All measure-
ment items were adapted from previous research. Respondents were asked to rate each measure-
ment item on a seven-point Likert scale.
The dependent variable (innovative behaviour) was measured by using the six items developed by
Scott and Bruce (1994). The remaining three independent variables were defined as second-order con-
structs based on the literature review. According to Zahra and George (2002) and Jansen, Van Den
Bosch, and Volberda (2005), potential absorptive capacity is composed of acquisition and assimilation,
while realised absorptive capacity includes transformation and exploitation. Each first-order construct
was measured by three items, as presented in Table 2. Lastly, knowledge sharing has two first-order
constructs: knowledge donating (i.e. giving) and knowledge collecting (i.e. receiving). Each of them
was measured by using the four items developed by de Vries, Van den Hooff, and de Ridder (2006).
Additionally, two dummy variables, namely rank and education, were included to control for the
hierarchical and educational effects on innovative behaviour. An employee with higher rank and edu-
cation may have more resource and expertise, which lead to innovative behaviour (Amabile 1983;
Ibarra and Andrews 1993; Scott and Bruce 1994). Managers were coded 1 and non-managers were
coded 0; employees with a graduate-level degree were coded 1 and those with undergraduate-
level degrees were coded 0.

Data collection
Respondents were employees in the research and development (R&D) department of a multinational
electronics company headquartered in South Korea. This company has over 80,000 employees world-
wide and manufactures consumer electronics such as smartphone, television, and refrigerator. Four
hundred employees were invited to participate in the online survey and 54% of them responded.
Excluding incomplete responses, the final sample size was 138. Three-quarters (75.4%) of respon-
dents were male. The majority were in the age range of 26–40 years (87.6%) and in the tenure
range of 3–15 years (76.1%). Table 3 summarises the respondents’ demographic characteristics.

Analysis method
The PLS structural equation modelling (PLS-SEM) approach was adopted to assess the research
model. SmartPLS 2.0 M3 (Ringle, Wende, and Will 2005) was used for data analysis. Unlike covari-
ance-based SEM, PLS-SEM does not have distributional assumptions and it generally achieves high
levels of statistical power with small sample sizes (Hair et al. 2014). Considering the sample data’s
non-normal distributions and small size, PLS-SEM seemed to be appropriate for this study. Following
 TECHNOLOGY ANALYSIS & STRATEGIC MANAGEMENT 7

Table 2. Measurement items.

Construct Items Adapted From
Innovative behaviour 1. I search out new technologies, processes, techniques, Scott and Bruce (1994)
and/or product ideas
2. I generate creative ideas
3. I promote and champion ideas to others
4. I investigate and secure funds needed to implement new
ideas
5. I develop adequate plans and schedules for the
implementation of new ideas
6. I am innovative
Potential absorptive (Acquisition) Zahra and George (2002); Jansen, Van Den
capacity Bosch, and Volberda (2005)
1. I regularly visit or contact other departments to acquire
new knowledge
2. I frequently interact with other departments
3. I regularly approach third parties such as consultants or
external experts
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(Assimilation)
1. I am quick to recognise shifts in the market (e.g.
competition, regulation, demography)
2. I quickly understand new opportunities to serve my
customers with new products or services
3. I quickly analyse and interpret changing market demands
Realised absorptive (Transformation) Zahra and George (2002); Jansen, Van Den
capacity Bosch, and Volberda (2005)
1. I quickly recognise the usefulness of new external
knowledge to existing knowledge
2. I quickly grasp the opportunities for new products or
services from new external knowledge
3. I periodically discuss consequences of market trends and
new product development
(Exploitation)
1. I clearly know how my job should be performed
2. I constantly consider how to better exploit knowledge
3. I share a common language with colleagues regarding our
products and services
Knowledge sharing (Donating) de Vries, Van den Hooff, and de Ridder
(2006)
1. When I’ve learned something new, I tell my colleagues
about it
2. I share information I have with my colleagues
3. I think it is important that my colleagues know what I am
doing
4. I share my skill and knowhow with my colleagues
(Collecting)
1. When I need certain knowledge, I ask my colleagues
about it
2. I like to be informed of what my colleagues know
3. I ask my colleagues about their abilities when I need to
learn something
4. When a colleague is good at something, I ask them to
teach me how to do it

Anderson and Gerbing’s (1988) two-stage approach, the measurement model was assessed first, then
the structural model was validated.

Results
Measurement model
Internal consistency reliability, convergent validity, and divergent validity were examined to evaluate
the quality of the measurement model. First, the internal consistency reliability of the research
 8 M. KANG AND M.-J. LEE

Table 3. Demographic characteristics of respondents.

Characteristics Frequency Ratio
Sex Male 104 75.4
Female 34 24.6
Age 26∼30 38 27.5
31∼35 46 33.3
36∼40 37 26.8
41∼45 15 10.9
46∼50 2 1.4
Company tenure Less than a year 17 12.3
1∼2 years 11 8.0
3∼5 years 31 22.5
6∼10 years 45 32.6
11∼15 years 29 21.0
16∼20 years 5 3.6
Rank Staff 35 25.4
Assist. Mgr. 30 21.7
General Mgr. 36 26.1
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Senior Mgr. 30 21.7

Director 7 5.1
Education Undergraduate 60 43.5
Graduate 78 56.5
Total 138 100.0

constructs was assessed by using Cronbach’s alpha (1951) and composite reliability (Fornell and
Larcker 1981). Cronbach’s alpha and the composite reliability values for all the constructs were
greater than 0.7 (Table 4), demonstrating adequate internal reliability (Nunnally and Bernstein
1994; Hair et al. 2014).
For convergent validity, the average variance extracted (AVE) values and factor loadings of the
measurement items on their assigned constructs were examined. The AVE values for all constructs
were greater than 0.5 (Table 4) and factor loading values were greater than 0.707, satisfying the
suggested criterion (Fornell and Larcker 1981; Chin 1998; Hair et al. 2014).
Lastly, discriminant validity was assessed by comparing the square root value of the AVE for
each construct with the other correlation values in the correlation matrix (Table 4) (Fornell and
Larcker 1981). The square root values of the AVE for all constructs, reported in the diagonal of
the correlation matrix, were greater than the off-diagonal elements in the corresponding row
and column (i.e. correlation values with other constructs). Thus, the measurement items satisfied
the tests for discriminant validity. The correlations between each second-order construct and
related first-order constructs (italicised numbers in Table 4) were not included for this
assessment.

Table 4. Results of reliability and validity tests.

CA CR AVE ACQ ASS TRN EXP DNT CLT IB KS PAC RAC
ACQ 0.709 0.838 0.632 0.795
ASS 0.839 0.903 0.757 0.515 0.870
TRN 0.759 0.862 0.676 0.477 0.605 0.822
EXP 0.705 0.835 0.628 0.426 0.517 0.640 0.793
DNT 0.874 0.915 0.732 0.280 0.275 0.427 0.463 0.855
CLT 0.842 0.895 0.680 0.336 0.225 0.397 0.434 0.648 0.825
IB 0.875 0.905 0.616 0.432 0.584 0.614 0.581 0.397 0.248 0.785
KS 0.895 0.917 0.581 0.338 0.278 0.455 0.495 0.919 0.896 0.361 0.762
PAC 0.819 0.869 0.527 0.830 0.905 0.633 0.551 0.320 0.314 0.596 0.350 0.726
RAC 0.824 0.873 0.534 0.500 0.623 0.916 0.895 0.490 0.457 0.661 0.523 0.657 0.731
Notes: CA = Cronbach’s alpha; CR = composite reliability; AVE = average variance extracted; ACQ = acquisition; ASS = assimilation;
TRN = transformation; EXP = exploitation; DNT = knowledge donating; CLT = knowledge collecting; IB = innovative behaviour;
KS = knowledge sharing; PAC = potential absorptive capacity; RAC = realised absorptive capacity. KS, PAC, RAC are second-
order constructs and have high correlation with corresponding sub-dimensions (e.g. KS has high correlations with DNT and
CLT). Grey cells in the diagonal of the correlation matrix report the square root value of AVE.
 TECHNOLOGY ANALYSIS & STRATEGIC MANAGEMENT 9

Since a single respondent self-reported all measurement items, Harman’s one-factor test
(Podsakoff et al. 2003) was conducted to check whether common method bias was a serious
concern. The measurement items for all research variables were entered into a principal component
factor analysis and the results of the un-rotated factor solution were examined. If there is a substantial
amount of common method bias, (a) only one factor will emerge from the analysis or (b) the first
factor will account for the majority of the variance (Podsakoff and Organ 1986). The result of analysis
yielded five factors with eigenvalues greater than one and the first factor explained only 35.9% of the
variance. Thus, common method bias did not seem to be a serious problem in this study.

Structural model and hypotheses testing

Before hypotheses testing, the structural model was assessed for collinearity (Hair et al. 2014). If there
are significant levels of collinearity among the independent variables, the path coefficient estimation
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may be biased. The variance inflation factor (VIF) values for all independent variables were much
smaller than the suggested criterion of 5 (Hair et al. 2014); thus, collinearity was not an issue.
Then, the bootstrap re-sampling method with 138 cases and 1000 re-samples was used to test the
proposed research hypotheses. The results of analysis are described with path coefficients and sig-
nificance level in Figure 2. Except for two of the research hypotheses suggesting knowledge sharing’s
direct (H2) and mediating effect (H3-1) on innovative behaviour, all the hypotheses were supported
with significance levels of .01.
More specifically, both potential absorptive capacity (path coefficient = 0.272; t = 3.151; p < .01)
and realised absorptive capacity (path coefficient = 0.451; t = 5.294; p < .01) significantly influenced
innovative behaviour. Thus, H1a and H1b were supported. On the contrary, knowledge sharing did
not have a significant effect on innovative behaviour (path coefficient = −0.001; t = 0.019; p > .05).
Concerning the interaction between absorptive capacity and knowledge sharing, potential absorp-
tive capacity significantly affected knowledge sharing (path coefficient = 0.350; t = 4.280; p < .01).
Knowledge sharing’s effect on realised absorptive capacity was also significant (path coefficient =
0.524; t = 6.575; p < .01). Thus, H3 and H4 were also supported.

Figure 2. Results of the structural model testing.

 10 M. KANG AND M.-J. LEE

In addition, the mediating effects of knowledge sharing and realised absorptive capacity were
tested following Baron and Kenny (1986). The mediating effect of knowledge sharing (H3-1) was
not significant because knowledge sharing (i.e. the mediating variable) did not show significant influ-
ence on innovative behaviour (i.e. the dependent variable). By contrast, in the case of realised absorp-
tive capacity, the three conditions of the mediation model were all satisfied. First, knowledge sharing
(the independent variable) without realised absorptive capacity (the mediating variable) significantly
influenced innovative behaviour (the dependent variable) (path coefficient = 0.344; t = 4.276; p < .01).
Second, knowledge sharing was significantly associated with realised absorptive capacity (path coef-
ficient = 0.524; t = 6.704; p < .01). Lastly, knowledge sharing’s effect became insignificant (path coeffi-
cient = 0.013; t = 0.160; p > .05) when realised absorptive capacity was included in the model as a
mediating variable. Thus, knowledge sharing’s influence on innovative behaviour was purely
mediated by realised absorptive capacity. The Sobel test (1982) also confirmed that knowledge shar-
ing’s indirect effect on innovative behaviour was satisfactory (Sobel test statistic = 5.438; p < .01).
Thus, H4-1 was supported.
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Discussion
Based on the literature review, a research model linking absorptive capacity, knowledge sharing, and
innovative behaviour at the individual level was developed and validated. To resolve conflicting
views on the interaction between the innovation-specific antecedents of innovative behaviour,
absorptive capacity and knowledge sharing, this study divided absorptive capacity into two sub-
dimensions (Zahra and George 2002). Potential absorptive capacity was suggested to influence
knowledge sharing, which was expected to affect realised absorptive capacity.
First, the results of analysis showed that both the sub-dimensions of absorptive capacity have a
significant influence on innovative behaviour. However, knowledge sharing’s direct effect on innova-
tive behaviour is not significant. This finding implies that the adoption and application of external
knowledge are critical compared with internal knowledge sharing, at least in the case of innovation.
External knowledge provides new insights for employees and thus leads to innovative behaviour
(Fosfuri and Tribó 2008). However, internal knowledge shared among colleagues in the same depart-
ment (i.e. R&D) may not stimulate innovation directly.
Potential absorptive capacity, which acquires and assimilates new external knowledge, provides
new knowledge for employees and enhances their cognitive skills to absorb knowledge from and
present knowledge to colleagues (Reagans and McEvily 2003). Then, successful communication
among employees through knowledge sharing provides opportunities to promote and use newly
absorbed knowledge within a firm. Thus, knowledge sharing indirectly influences innovative behav-
iour through realised absorptive capacity.

Implications
This research provides a number of academic contributions. First, by differentiating two sub-dimen-
sions of absorptive capacity based on prior research, we explain the detailed mechanism of the
absorptive capacity–knowledge sharing interaction at the individual level. Employees’ individual
absorptive capacity and their knowledge sharing are the main components of organisational absorp-
tive capacity (Cohen and Levinthal 1990). Thus, understanding how absorptive capacity and knowl-
edge sharing are interrelated at an individual level contributes to the research on absorptive capacity.
Second, by adopting a knowledge management perspective, new antecedents of innovative
behaviour were explored. Previous studies of innovative behaviour have treated it as one of the
employees’ positive behaviours within a firm. Thus, an individual’s personal factors such as motiv-
ation (George and Zhou 2002) and personality (Oldham and Cummings 1996) as well as contextual
factors such as organisational climate (Scott and Bruce 1994) and leadership (Pieterse et al. 2010)
have been identified as important antecedents. However, an individual’s innovative behaviour is
 TECHNOLOGY ANALYSIS & STRATEGIC MANAGEMENT 11

the foundation of organisational innovation, which involves the creation (or adoption) and
implementation of new knowledge. Thus, this study adopted a knowledge management perspective
and validated that absorptive capacity and knowledge sharing, the main antecedents of organis-
ational innovation, are the critical factors of innovation at an individual level as well.
In addition to the academic contributions, the current study provides guidelines for practitioners.
First, to facilitate innovative behaviour, both employees’ absorptive capacity and knowledge sharing
among them should be nurtured. An individual with high absorptive capacity can play the role of a
knowledge gatekeeper in an organisation (Cranefield and Yoong 2007). However, for external knowl-
edge to be used properly at an organisational level, it should be shared among employees and trans-
mitted to the right employees who need it. This knowledge diffusion cannot be achieved without
active knowledge sharing. On the contrary, if employees have low absorptive capacity and only
focus on sharing their internal knowledge, existing knowledge will be repeatedly exploited, ignoring
valuable external knowledge.
Second, transforming and exploiting external knowledge is just as important as acquiring and
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assimilating it. With rapid technological progress and short product life cycles, the paradigm of
open innovation is gaining popularity (Chesbrough 2003). In the case of inbound open innovation,
the role of potential absorptive capacity, which recognises and adopts valuable external knowledge,
is critical. However, to properly merge that knowledge into existing internal knowledge and to com-
mercialise it into new products or services, realised absorptive capacity is also necessary. Thus, in
addition to providing employees with many opportunities to be exposed to and to learn external
knowledge, internal communication among employees from various departments (or business
units) and exploratory trials exploiting external knowledge along with internal knowledge should
be encouraged.

Limitations and possible directions for future research

This study has some limitations that should be addressed in future research. First, a cross-sectional
analysis was adopted to validate the research model. Although the current study’s causal research
model and hypotheses were developed based on strong theoretical foundations after a compre-
hensive literature review, the results of the analysis provide only a suggestion rather than
perfect proof of a causal relationship. A longitudinal study could more rigorously validate the
current research model with subsequent mediation relationships (e.g. Carmeli and Spreitzer
2009). While multiple waves of surveys certainly require more research effort, the subsequent
data can be valuable.
Second, the study’s respondents were employees in a single department within a single company.
Although an R&D department seems to be appropriate for validating an innovation and knowledge
management-related research model, the generalisation of the results may require that future studies
replicate them in different contexts, such as in different departments, countries, or cultures. This
approach would increase the data collection efforts required and need for global collaboration
among researchers from various geographical regions or cultural areas.
Third, to take account of the multi-level property of absorptive capacity, multi-level analysis
such as hierarchical linear modelling (Raudenbush and Bryk 2002) could be adopted as a research
method. This method allows researchers to simultaneously examine antecedents from multiple
levels. For example, organisational-level R&D investment and individual-level knowledge sharing
can be considered in a single research model. This approach requires a sufficient sample size
for each level.
Finally, although this study focused on innovation-specific antecedents of innovative behaviour,
traditional antecedents, such as personality and motivation, are still valid and expected to influence
absorptive capacity and knowledge sharing as well (e.g. Da Silva and Davis 2011). Thus, including
both innovation-specific and traditional antecedents of innovative behaviour and exploring inter-
relationship among them will be an interesting future research.
 12 M. KANG AND M.-J. LEE

Funding
This work was supported by Konkuk University [grant number 2014-A019-0096].

Notes on contributors
Minhyung Kang is an assistant professor of the Department of Advanced Industry Fusion at Konkuk University in Seoul,
Korea. His research interests include knowledge management, collective intelligence, and social network analysis. His
studies have been published in Journal of the American Society for Information Science and Technology, Journal of Knowl-
edge Management, Journal of Information Science, and Asia Pacific Journal of Information Systems.
Mi-Jung Lee is a team leader of the Investment Planning team at LStone, Inc. She received her master’s degree in man-
agement of technology from Konkuk University. Her main research areas are knowledge management, organisational
behaviours, and organisational innovation.
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