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Absorptive Capacity in the Software Industry: Identifying Dimensions That Affect Knowledge and Knowledge Creation Activities

Leeds School of Business, University of Colorado-Boulder, UCB 419, Boulder, CO 80309-0419, Sharon.Matusik{at}colorado.edu

Michael B. Heeley

Colorado School of Mines, Division of Economics and Business, 816 15th Street, Golden, CO 80401

The ability of the firm to effectively use external knowledge (its absorptive capacity) is important to firm competitiveness and innovativeness. However, the wide array of approaches to studying absorptive capacity has obscured our understanding of what drives the effective use of external knowledge. The authors show that absorptive capacity is composed of mutliple dimensions: (a) the firm’s relationship to its external environment; (b) the structure, routines, and knowledge base of the main value creation group(s); and (c) individuals’ absorptive abilities. Their data illustrate that each of these dimensions contributes to increased knowledge or knowledge creation activities.

Key Words: absorptive capacity • knowledge • learning • software industry • innovation

Journal of Management, Vol. 31, No. 4, 549-572 (2005)
DOI: 10.1177/0149206304272293


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