Open innovation: Are absorptive and desorptive capabilities complementary?

While recent studies in open innovation emphasize the synergies between in-bound and out-bound knowledge flow, empirical results are inconsistent. In this study, we argue that in order to engage simultaneously in both buying and selling activities, firms need to develop specific capabilities to manage knowledge inflows and outflows, e.g., absorptive and desorptive capacities. We build on key aspects of open innovation and knowledge management literature, arguing that absorptive and desorptive capacity are complementary rather than sub-stitute, and engaging simultaneously in both activities should allow firms to develop their financial performance. We test our model using a sample of 541 New Zealand firms that are deeply involved in international collabo-rations and find empirical evidence that absorptive and desorptive capacity are not independent and the balanced development of these capabilities has higher impacts on firm's performance. Further, our findings indicate that technology licensing capability is not a stand-alone task, and its interplay with absorptive capacity plays a key role in the development of a firm's performance.

Automated summary

Recent studies on open innovation have shown inconsistent empirical results regarding the synergies between in-bound and out-bound knowledge flow. In this study, we argue that firms need to develop specific capabilities, such as absorptive and desorptive capacities, to engage in both buying and selling activities simultaneously. Our findings, based on a sample of 541 New Zealand firms involved in international collaborations, suggest that absorptive and desorptive capacity are not independent and the balanced development of these capabilities has a significant impact on firm performance. Additionally, we find that the interplay between technology licensing capability and absorptive capacity plays a key role in a firm's performance.