The New Venture Innovation Process: Examining the Role of Absorptive Capacity

Research output: Chapter in Book/Entry/PoemChapter

16 Scopus citations


The relationship between knowledge and innovation is well established in the strategy and entrepreneurship literatures. However, little is known about how absorptive capacity - the firm's ability to acquire, assimilate, and use new knowledge - effects innovation in new firms. We build on extant conceptual arguments from scholars who assert that the concept of absorptive capacity can be delineated into a number of individual components, and we test the influences of each component on innovation using a sample of new firms in the Swedish telecom, IT, media, and entertainment sectors. We find that while all of the components of absorptive capacity influence innovation in new ventures, acquiring new technological knowledge and employing mechanisms for exploiting new knowledge have the greatest effects. Our results provide a direct empirical test of the linkage between absorptive capacity and innovation, and suggest that the effects of these components of absorptive capacity on performance are more complex than previously articulated in the literature. We conclude with implications for future research surrounding absorptive capacity.

Original languageEnglish (US)
Title of host publicationEntrepreneurial Strategic Processes
EditorsG.T. Lumpkin, Jerome Katz
Number of pages27
StatePublished - Jul 26 2007
Externally publishedYes

Publication series

NameAdvances in Entrepreneurship, Firm Emergence and Growth
ISSN (Print)1074-7540

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Economics, Econometrics and Finance (miscellaneous)


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