EFFECT OF KNOWLEDGE ABSORPTIVE CAPACITY ON INNOVATION ORIENTATION IN BUSINESS SERVICES

Abstract

The purpose of this paper is to examine the impact of knowledge absorptive capacity (KAC) on innovation orientation in business services. An empirical analysis was conducted on two samples (scientific experts and—in the next step, business service companies). The authors applied one-way ANOVA, HSD Tukey’s post hoc tests, and structural equation modelling. Approached from a knowledge-based view, this research has found that the impact of KAC on all six innovation orientation dimensions is significant and positive. This empirical evidence also supports the thesis that KAC impacts the business performance of firms. Managers should raise a company’s competitive advantage by introducing an innovation orientation, which requires a high level of KAC. This study advances the literature on KAC and innovation orientation by confirming the significant impact of KAC on business performance and a firm’s innovation orientation.