Leveraging customer knowledge obtained through social media: The roles of R&D intensity and absorptive capacity

Abstract

Previous research has highlighted the benefits of leveraging knowledge generated through internal R&D and external customer knowledge to drive firm innovation. While it is understood that both these knowledge sources may have complementary and/or substituting effects, our understanding of the mechanism through which they affect innovation performance is limited. Therefore, we develop a theory and empirically test a multiple moderation model to investigate the effect of customer knowledge obtained through social media on innovation performance, contingent on the firm’s realized absorptive capacity and R&D intensity. Using PLS-SEM multi-group analysis, we find that firm R&D intensity complements realized absorptive capacity in integrating customer knowledge from social media for innovation performance. Given resource constraints, firms with a low level of R&D intensity should focus on cultivating a strong realized absorptive capacity to maximize the benefits of social media. In contrast, firms with high R&D intensity need not overly prioritize developing realized absorptive capacity.