Where to search for process innovations? The mediating role of absorptive capacity and its impact on process innovation

Omid Aliasghar*, Elizabeth L. Rose, Sylvie Chetty

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

22 Citations (Scopus)


While the potential of open innovation to develop product-related improvements through the use of external knowledge sources is undeniable, our understanding of how firms become process innovators remains limited. Distinguishing between product and process innovation is important, as insights gleaned from investigating product innovation may not relate directly to the study of process innovation. This study provides new insight into open innovation and absorptive capacity by proposing the mediating role of absorptive capacity – potential and realized – on the relationship between knowledge search from external sources and process-related innovation activities. We test our model using a sample of 171 auto component suppliers in Iran, and find evidence that the learning effects of external scanning increase when a firm learns how to better manage external searches in terms of external absorptive capacity routines. Our results indicate that, while knowledge search from value chain partners is related to process innovation, knowledge search from universities and other research organizations is not, and that potential absorptive capacity mediates the relationship between external knowledge search and process innovation. These findings shed further light on the relationship between a firm's openness and its process innovation.

Original languageEnglish
Pages (from-to)199-212
Number of pages14
JournalIndustrial Marketing Management
Publication statusPublished - 1 Oct 2019
MoE publication typeA1 Journal article-refereed


  • Open innovation
  • Potential and realized absorptive capacity
  • Process innovation
  • Universities and research organizations
  • Value chain partners


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