Linking properties of knowledge with innovation performance: the moderate role of absorptive capacity

The purpose of this paper is to unravel the complex linkages between properties of knowledge, firm's absorptive capacities, and innovation performance in China small and medium‐sized enterprises (SMEs).

The authors utilize moderated multiple regression (MMR) to explore the complex relationships by using the empirical data of Chinese information technology and electro‐communication firms during 2005‐2008.

The results show that only a few knowledge properties have negative effects on innovation performance. Most knowledge properties have a positive effect on innovation. The results also claim that the relationship between properties of knowledge and innovation performance is more pronounced when the firm has higher absorptive capacity.

The study indicates that properties of knowledge and absorptive capacity are two inseparable determinants for innovation performance, and absorptive capacity moderates the relationship between properties of knowledge and innovation performance.