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  • Publication
    Absorptive Capacity : Absorbing External Knowledge and Internal Resources
    (SMS Strategic Management Society, 2015-10-03) ; ;
    Despite being one of the most prominent concepts in the current management literature, our understanding of absorptive capacity (AC) - the ability to assimilate external knowledge - is still limited. Particularly, previous research has assumed away the costs of AC, implicitly claiming that more AC is always better. We develop a fit perspective between levels of AC and external knowledge sourcing (EKS), arguing that firms combining high levels of AC with low levels of EKS bear the costs of building and maintaining AC without recouping these investments. In line with our theoretical arguments, empirical evidence on 175 European firms shows that AC yields superior financial performance implications when it is matched by high levels of EKS.