Proceedings of the 12th European Conference on Knowledge ...

Vincenzo Cavaliere and Daria Sarti
possess “<strong>the</strong> ability to produce more innovations” (Tsai, 2001: 998). Innovation is an outcome <strong>of</strong>
organizational learning and it also has a relationship with absorptive capacity (Lane et al., 2006).
Since <strong>the</strong> seminal work by Cohen and Levinthal (1989: 1990) absorptive capacity is used as predictor
<strong>of</strong> innovative activity. Fur<strong>the</strong>rmore, some authors consider absorptive capacity in SMEs as a
preliminary condition for firms’ growth and innovation (Gray, 2006; Wang et al., 2010).
Absorptive capacity, and <strong>the</strong>refore <strong>the</strong> process <strong>of</strong> organizational learning that leads to <strong>the</strong> exploration
and exploitation <strong>of</strong> knowledge (March, 1991), relies on two important elements: <strong>the</strong> existing
knowledge base and <strong>the</strong> intensity <strong>of</strong> efforts made for <strong>the</strong> development <strong>of</strong> technological capabilities. In
this sense, this paper considers both <strong>the</strong> prior organizational knowledge and <strong>the</strong> importance given to
<strong>the</strong> different knowledge sources for firm’s innovation. Considering <strong>the</strong> former as determinant to
assimilate new knowledge and exploit it; and <strong>the</strong> latter, as <strong>the</strong> importance given to different sources <strong>of</strong>
knowledge (suppliers, universities, staff etc.) for organizational learning, in order to feed <strong>the</strong>
organizational knowledge base.
Most contributions about knowledge sources for firm’s innovation show that enterprises can acquire
knowledge via interactions with o<strong>the</strong>r actors, through cooperative agreements, where innovation
efforts are made jointly with private firms and/or public institutions and universities (Caloghirou et al.,
2004; Kogut, 1988) or “functioning” relations with actors in <strong>the</strong> “supply chain” (Lorenzoni, Lipparini,
1999; Fritsch, Lukas, 2001). In this sense, <strong>the</strong> effectiveness <strong>of</strong> <strong>the</strong> knowledge transfer process will
primarily depend on <strong>the</strong> characteristics <strong>of</strong> <strong>the</strong> transferred knowledge in terms <strong>of</strong> tacitness, complexity,
ambiguity (Winter, 1987; Zander, Kogut, 1995; Suzlanski, 1996) and on <strong>the</strong> absorptive capacity <strong>of</strong> <strong>the</strong>
target unit (Gupta, Govindarajan, 2000; Foss, Pedersen, 2002).
Finally, ano<strong>the</strong>r critical source through which organizations can acquire knowledge is via human
capital (C<strong>of</strong>f, 1997; Hitt et al., 2001).
3.2 The importance <strong>of</strong> knowledge base for innovation processes
The ability <strong>of</strong> firms to absorb new external knowledge depends, first <strong>of</strong> all, on <strong>the</strong>ir levels <strong>of</strong> prior
related knowledge since “it permits <strong>the</strong> assimilation and exploitation <strong>of</strong> new knowledge” (Cohen,
Levinthal, 1990: 135-6). Fur<strong>the</strong>r, according to Kogut and Zander (1992: 384), is very important “to
understand <strong>the</strong> knowledge base <strong>of</strong> a firm as leading to a set <strong>of</strong> capabilities that enhance <strong>the</strong> chances
for growth and survival”.
The existing knowledge base increases <strong>the</strong> ability to search, recognize and represent a problem as
well as assimilate new knowledge for problem solving, “provides a more robust basis for learning” and
“facilitates <strong>the</strong> innovative process” (Cohen, Levinthal, 1990: 134-5).
Vega-Jurado and colleagues (2008) suggest two possible effects <strong>of</strong> internal competencies on <strong>the</strong>
firm’s innovative performance: a direct positive effect on innovation output and an indirect effect from
increased absorptive capacity. In <strong>the</strong>ir findings about Spanish manufacturing SMEs, <strong>the</strong>y suggest that
<strong>the</strong> development <strong>of</strong> technological competences is <strong>the</strong> most important factor for <strong>the</strong> introduction <strong>of</strong> new
products into <strong>the</strong> market (i.e. product innovation). Fur<strong>the</strong>r, <strong>the</strong>y found that internal competencies and
<strong>the</strong> use <strong>of</strong> external sources <strong>of</strong> knowledge do not play in a complementary manner but ra<strong>the</strong>r result as
substitutes. They conclude that “cooperation with scientific agents does not constitute a key factor to
develop new products” (Vega-Jurado et al., 2008:630).
On <strong>the</strong> o<strong>the</strong>r hand, no empirical evidence seems to support a relation between internal knowledge
base and process innovation. Ra<strong>the</strong>r, evidence suggests that process innovation is much more
coherent with <strong>the</strong> use <strong>of</strong> sophisticated channels for imitation from external sources such as
recruitment <strong>of</strong> experts from o<strong>the</strong>r firms (Ornaghi, 2006).
Considering, <strong>the</strong>se empirical evidences, we posit that:
HP1a: A strong knowledge base is not related to process innovation.
HP1b: A strong knowledge base is positively related to product innovation.
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