Absorptive capacity, exporting activities, innovation openness and innovation performance: A SEM approach towards a unifying framework

We develop a unified framework, in which internal knowledge creation capacity and the diversity of innovation openness, as measured by R&D collaboration, rule innovation and exports. Theoretical and empirical links between these major components are identified and measured employing Structural Equation Modelling on a sample of Greek R&D active manufacturing firms. The methodology adopted allows multiple feedback loops in the context of a non-recursive system of equations, which in turn elevates the role of indirect effects. The main empirical finding indicates that firms' absorptive capacity - besides fueling directly innovation - plays a key role in filtering and integrating external knowledge stimuli from R&D collaborations. Although the identified indirect effects are statistically significant, the corresponding direct effects remain dominant.