Fostering absorptive capacity through leadership: A cross-cultural analysis

Current business dynamics render a firm's absorptive capacity, i.e., its ability to explore and exploit external knowledge, highly relevant for successfully competing in the global marketplace. Based on data from 608 firms in Austria, Brazil, Germany, India, Singapore, and the USA, we analyze how absorptive capacity can be fostered through different leadership styles and whether national culture moderates this relationship. We reveal that transformational and transactional leadership have a positive impact on absorptive capacity, which is moderated by power distance and uncertainty avoidance. Overall, the study's findings enable managers to foster knowledge absorption and innovation generation in an international context.