Relative absorptive capacity and interorganizational learning

TLDR

Prior interorganizational learning research has focused on absorptive capacity, yet its definition implies equal learning ability from all partners. This study reconceptualizes absorptive capacity as a dyad‑level construct—relative absorptive capacity—to better capture learning dynamics. The authors argue that learning depends on similarity in knowledge bases, organizational structures, compensation policies, and dominant logics, and test this model using pharmaceutical–biotechnology R&D alliances. Results show that partners’ shared basic knowledge, lower management formalization, research centralization, compensation practices, and research communities enhance learning, and that relative absorptive capacity explains interorganizational learning better than traditional absorptive capacity or R&D spending. © 1998 John Wiley & Sons, Ltd.

Abstract

Much of the prior research on interorganizational learning has focused on the role of absorptive capacity, a firm's ability to value, assimilate, and utilize new external knowledge. However, this definition of the construct suggests that a firm has an equal capacity to learn from all other organizations. We reconceptualize the firm-level construct absorptive capacity as a learning dyad-level construct, relative absorptive capacity. One firm's ability to learn from another firm is argued to depend on the similarity of both firms' (1) knowledge bases, (2) organizational structures and compensation policies, and (3) dominant logics. We then test the model using a sample of pharmaceutical–biotechnology R&D alliances. As predicted, the similarity of the partners' basic knowledge, lower management formalization, research centralization, compensation practices, and research communities were positively related to interorganizational learning. The relative absorptive capacity measures are also shown to have greater explanatory power than the established measure of absorptive capacity, R&D spending. © 1998 John Wiley & Sons, Ltd.