Chapter 17: KNOWLEDGE ABSORPTIVE CAPACITY, INNOVATION, AND FIRM’S PERFORMANCE: INSIGHTS FROM THE SOUTH OF BRAZIL

This paper aims to verify the relationships that may exist between knowledge absorptive capacity (ACAP), innovation performance, and organisational performance in Brazilian firms. A sample of 111 firms from Southern Brazil was surveyed and PLSSEM was used to test the theoretical hypotheses. The relevance of ACAP for innovation and organisational performance is supported. The research also shows that realised ACAP has more influence on innovation performance compared with potential ACAP. Some guidelines for furthering ACAP models suitable for developing countries are provided as well. The findings are a good reference for practitioners as they identify possible actions which can enhance ACAP and thereby contribute to improving innovativeness and performance. This research complements earlier studies which called for the exploration of the role of ACAP on innovation performance and firm’s competitiveness in developing countries, and it opens new avenues for multidisciplinary research.