The effect of knowledge stickiness and interaction on absorptive capacity: evidence from furniture and software small- and medium-sized enterprises in Indonesia

PhD ceremony: Ms. N. Indarti, 13.15 uur, Academiegebouw, Broerstraat 5, Groningen

Thesis: The effect of knowledge stickiness and interaction on absorptive capacity: evidence from furniture and software small- and medium-sized enterprises in Indonesia

Promotor(s): prof. R.J. Jorna

Faculty: Economics and Business

This study focuses on the capability of an organization to absorb knowledge from the external business environment and to use it in the development of innovations (i.e. absorptive capacity). The main research questions are (1) what is the effect of stickiness of external knowledge on a firm’s absorptive capacity?; and (2) what is the influence of interaction on a firm’s absorptive capacity? The knowledge stickiness is viewed from the degree of its accessibility, both cognitively and physically. Interconnectedness between knowledge domains and knowledge types are used to examine the knowledge stickiness. The interaction between an organization and its environment (direct individual, direct institutional, and indirect knowledge sources) takes place through various communication channels. Based on data from a survey among 98 furniture and 100 software firms in various cities in Indonesia, the study shows that knowledge stickiness has a significant impact on a firm’s absorptive capacity. Alike, the interaction has also a significant effect on their absorptive capacity. Altogether, the knowledge stickiness and the interaction explain 26% of the absorptive capacity variance. The study also indicates that the effect of knowledge stickiness and interaction on firms’ absorptive capacity is stronger for older and larger companies than for younger and smaller ones. The research confirms that the level of absorptive capacity of the software firms, which represent the more knowledge-intensive organizations, is significantly higher than that of the furniture firms, as the representatives of the less knowledge-intensive companies. The findings from this study might be used a basis for setting up appropriate initiatives and policies to promote the SMEs, especially in the context of emerging economies.