Potential and Realized Absorptive Capacity as Complementary Drivers of Green Product and Process Innovation Performance

Nowadays, companies need to absorb new knowledge from external sources to grasp environmental issues. However, the internal mechanisms through which external knowledge is turned into green innovations remain scarcely addressed. Hence, this paper aims to investigate the relationships between the two dimensions of absorptive capacity (potential and realized) with green products and process innovation performance. This study contributes to the literature by disentangling how companies need to acquire, assimilate, transform and exploit external environmental knowledge to develop green innovations. To this aim, this empirical study is based on a sample shaped by 112 firms belonging to the Spanish automotive components manufacturing sector. The results provide evidence to show that potential and realized absorptive capacities are positively related to both green product innovation performance and green process innovation performance.