Absorptive capacity and business performance: The mediating effects of innovation and mass customization
Industrial Management & Data Systems
ISSN: 0263-5577
Article publication date: 20 August 2018
Issue publication date: 28 September 2018
Abstract
Purpose
The purpose of this paper is to examine the multiple paths of absorptive capacity’s (AC) effect on business performance (BP): direct effect and indirect effects through innovation and mass customization (MC).
Design/methodology/approach
The authors examined the role of innovation and MC capability on the relationship between AC and BP. Data from 278 Chinese firms in four manufacturing industries collected by questionnaire are used to empirically examine the proposed model by Structural equation modeling.
Findings
The results show that AC can directly enhance BP, and indirectly through innovation and MC capability. The study also finds that MC capability has a stronger mediating effect than innovation.
Originality/value
Prior studies have not yet built linkages between AC and BP with both innovation and MC’s effects. This study provides empirical evidence of the effects of AC on BP and three paths are discussed including AC’s direct effect and indirect effects through innovation and MC to firm’s BP. This study provides a new direction for executives to better understand the movement of knowledge along supply chain and in intra-organizational environment, and of the importance of innovation and MC capability since they are essential carriers for BP enhancement.
Keywords
Acknowledgements
This research is supported by a major program grant of the Natural Science Foundation of China (NSFC) (No. 71090403), the Humanities and Social Science Research Foundation of the Ministry of Education of China (No. 17YJA630061), and the Fundamental Research Funds for the Central Universities.
Citation
Liu, X., Zhao, H. and Zhao, X. (2018), "Absorptive capacity and business performance: The mediating effects of innovation and mass customization", Industrial Management & Data Systems, Vol. 118 No. 9, pp. 1787-1803. https://doi.org/10.1108/IMDS-09-2017-0416
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited