How could firms benefit more from absorptive capacity under technological turbulence? The contingent effect of managerial mechanisms

Abstract

Based on the knowledge-based view, this paper examines how firms can achieve an enhanced new product performance from the absorptive capacity under technological turbulence. By examining 165 Chinese pharmaceutical firms' data, this paper found that under technological turbulence, the benefits of absorptive capacity on new product performance will decrease; however, if firms maintain complementary managerial mechanisms (technological environmental scanning mechanism and coordination mechanism in this paper), the decrease effect of technological turbulence could be mitigated. Theoretically, the negative moderating effect of technological turbulence extends the investigation of the under assumptions of absorptive capacity and enriches the research on the contingency context of ACAP. Moreover, the examination of the alleviation effect regarding the managerial mechanisms responds to the scholar's appeals for more research focusing on management factors in absorptive capacity and product development research. The results also highlight the managerial-environment fit in the new product development area. Practically, this paper offers managerial implications for managers: they should focus more attention on technological breakthroughs so as to prepare early for any potential uncertainties and opportunities; moreover, managers could cultivate the managerial mechanisms to enhance knowledge monitoring and sharing activities, which could be utilised to buffer the uncertainty and update the firm's ACAP.