Department of strategic management & entrepreneurship Cumulative? Opening the black box of absorptive capacity: A Meta-Analytical Review of the Micro foundations University of London Birbeck CIMR WORKSHOP, June 23rd 2017 L.J. Cosaert, H.W. volberda & J.S. sidhu

Literature on Absorptive Capacity Introduction Literature on Absorptive Capacity GAP in Literature Utilize and absorb ext. information (Adler, 1965; Cohen &Levinthal, 1990) Reconceptualizations: relative AC (Lane & Lubatkin, 1996; Zahra & George, 2002; Todorova & Durisin, 2007); Driver of innovation (Tsai, 2001); competitive advantage (Fosfuri & Tribó, 2008); aspiration levels (Cohen & Levinthal, 1990); firm performance (Tsai, 2001) Importance antecedents is prior experiences & related knowledge(C&L; Argote et al., 2003; Van den Bosch et al. 1999) AC has been treated as a black box! Used as a dependent variable, using R&D expenditures as a proxy. However, absorptive capacity is actually a multi-dimensional and multi-level construct (Lane et al., 2006). No understanding about the micro-foundations regarding individual organizational characters (Felin et al., 2012) The scholarly understanding will be specifically increased if this is analyzed through the micro-foundations lens (Volberda et al., 2010). No quantitative utilization of the accumulated extant research Main Research question: “What type of antecedents enhance absorptive capacity most?

cumulative The premise of cumulative absorptive capacity AC is cumulative (Cohen & Levinthal, 1990): e.g. production experience to reorganize or automatize processes Memory development: accumulated prior knowledge enhances learning (Cohen & Levinthal, 1990) AC history- or path- dependent; the lack of investment in a specific area of expertise early on may foreclose the future development of a technical capability in that area. (Cohen & Levinthal, 1990 pp. 128); natural trajectory (Nelson & Winter, 1982) This seems all quite deterministic… Is there still a role for management?

THE TAXONOMY OF the ANTECEDENTS The antecedents of AC can be grouped into inter-organizational, managerial and intra-organizational antecedents (Volberda et al., 2010) In this study, we expand the taxonomy Antecedents of Absorptive Capacity Type Managerial Antecedents Inter-Organizational Antecedents Intra-Organizational Antecedents Prior Sub-Type Mng. Human Capital Mng. Social Capital Mng. Cognition Structural Dim. Relational Dim. Cognitive Dim. Firm structure ICT and R&D Prior Related knowledge Examples of mechanisms Values Education Interest Personality Social network ties, network characteristics, relationships Beliefs Emotions Regime Mental activities Network ties Density Hierarchy Respect Friendship Trust Norms Language; Narratives Culture Codes Org. form Centralization Job rotation IT usage Integrated tech. Communication Prior related knowledge; R&D Stock R&D Com-muniites c

hypotheses Hypothesis 1: Inter-organizational antecedents will be positively related to AC Hypothesis 2: Managerial antecedents will be positively related to AC. Hypothesis 3: Intra-organizational antecedents will be positively related to AC Hypothesis 4: Prior experiences will be positively related to AC Managerial Antecedents Managerial Cognition Managerial Social Capital Managerial Human Cap Inter-Organizational Antecedent Structural Dimensions Cognitive Dimensions Relational dimensions Intra-Organizational Antecedents Firm characteristics ICT and R&D Prior Knowledge Prior related knowledge H1 H2 c Absorptive Capacity H3 H4

Meta-Analytical Techniques Sample and methods Meta-Analytical Techniques Data Collection Data derived from academic articles & research papers (03/1990 -02/2015) Keywords include: absorptive capacity, knowledge acquisition, R&D etc Outcome yields 130 articles, 2,000+ effect sizes and a total sample size exceeding 60,000 observations Coding Coding Protocols based on Lipsey & Wiley (2001) 3 Levels of Coding Antecedents types, absorptive capacity, control variables HOMA Hedges-Olkin meta-analysis (1985): applied Fisher z-conversion to comply with the normality assumption Inverse variance for importance of effect sizes (focus on precision) Random effects model: conservative, variability due to population and sampling error

Antecedents of absorptive capacity

Antecedents of potential absorptive capacity

Antecedents of realized absorptive capacity

Conclusion: CUMULATIVE? Managerial Dynamic Capabilities? The importance of ICT and R&D is important across the dimensions of AC Developing absorptive capacity: Managerial: cognition (r= 0,365) & social capital (r = 0,340) have the largest effect sizes Developing potential AC: Inter-organizational: cognitive dimensions (r = 0,456) (cognitive distance, shared codes) Managerial: cognition (r= 0,413) Developing realized AC: Inter-organizational: structural dimensions (r = 0,456) Results show the importance of dynamic managerial capabilities (cf. Helfat & Martin, 2014) Examples of future Research: Managerial intentionality (i.e. the ability to and intention to influence the evolutionary path of the firm) instead of focusing too much on prior experiences

Q&A and DISCUSSION Theoretical contribution: determinism versus voluntarism What are your key take-aways? / What do you think about the contributions? What are the shortcomings of this paper? What (meta-)questions would you be interested in to further explore?