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" Relationship Between the Innovation Performance and Absorptive Capacity of Manufacturing Firms in Ethiopia "
Eshete, Abel
Smiley, Garrett
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Latin Dissertation
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English
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| Record Number
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1110701
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| Doc. No
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TLpq2488164270
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| Main Entry
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Eshete, Abel
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Smiley, Garrett
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| Title & Author
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Relationship Between the Innovation Performance and Absorptive Capacity of Manufacturing Firms in Ethiopia\ Eshete, AbelSmiley, Garrett
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| College
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Northcentral University
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| Date
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2020
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2020
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| Degree
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Ph.D.
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| Page No
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119
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| Abstract
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Innovation is critical for least-developed countries like Ethiopia to survive in the global trade competition. The Ethiopian government has been attracting foreign investment to boost domestic firms’ innovation through knowledge transfer. However, Ethiopian manufacturing firms still lag in innovation globally. This study’s purpose was to examine this issue using the absorptive capacity theory, which proposes that firms with higher absorptive capacity perform better in innovation. Absorptive capacity comprises two components: potential absorptive capacity (the ability to acquire and assimilate knowledge) and realized absorptive capacity (the ability to transform and commercialize knowledge). Two hypotheses were formed to test each of these components’ impact on Ethiopian manufacturing firms’ innovation performance. A quantitative correlational design was implemented using secondary data, the 2016 Ethiopia Innovation Capability Survey, collected by the World Bank and Tilburg University. The survey sample contained 204 manufacturing firms from six regions of Ethiopia. A generalized structural equation modeling analysis in STATA showed that the firms’ innovation performance was not significantly related to their potential absorptive capacity, β = .01, ρ > .05. However, their innovation performance was significantly related to their realized absorptive capacity, β = .24, ρ < .05. These findings indicated that, for these firms, innovation performance would require skilled labor and technology that transforms external knowledge into new products and services rather than merely acquiring and assimilating the knowledge. Ethiopian business leaders and policymakers may use this understanding to devise effective strategies and policies that foster skill development and technology adoption. Besides, the study offered empirical evidence of the absorptive capacity theory in Ethiopia’s setting, and its theoretical framework would guide similar future studies in other least-developed countries.
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African studies
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Business administration
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Labor economics
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Management
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Political science
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Public policy
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