Absorptive capacity, technological opportunity, knowledge spillovers, and innovative effort

This paper analyses the influence of two variables related with industrial structure (technological opportunity and knowledge spillovers) and one management variable (absorptive capacity) on the innovative efforts developed by firms. These relationships are investigated in a total of 406 Spanish manufacturing companies with an established degree of innovative activity. In addition the nature of the variable 'absorptive capacity' is considered and an index is suggested that would render this concept operational through analysis of the factors defining it and by which the process of building it up is influenced. As a result of this study it is demonstrated that the absorptive capacity variable determines innovative effort to a greater extent than the two structural variables. It is also shown that absorptive capacity has a moderating effect on the relationship between technological opportunity and innovative effort being this one of the most remarkable results obtained from the work.