Executing absorptive capacity: a case study of spillover utilization by a domestic firm in China's hotel industry

Foreign direct investment (FDI) spillovers are critical for domestic firms' growth. Extant econometric research focuses on spillover sources and explores whether FDI presence can increase the domestic firm's productivity. In contrast, adopting a spillover-absorber perspective, we conduct a qualitative study of a Chinese hotel's absorption of spillovers over a 16-year period. Our findings delineate how a domestic firm executes constituent activities of absorptive capacity (AC) to utilize spillovers, and how organizational antecedents (organizational commitments and organizational culture) at the strategic level, and complementary capabilities (socialization capabilities and systems capabilities) at the operational level, enhance its potential and realized AC, respectively.

Automated summary

This study examines how a Chinese hotel absorbs foreign direct investment (FDI) spillovers, by analyzing organizational antecedents at the strategic level and complementary capabilities at the operational level to enhance its absorptive capacity (AC).