Resumo

Extant literature has indicated the importance of the absorptive capacity for creating value through innovation. A company must have combinative capabilities to integrate, recombine and exploit knowledge resources (Sheng, 2017). As companies do not have all the knowledge they need to meet market demand, they access knowledge from external sources. Thus, willing to exploit knowledge, companies depend on their internal capabilities as well as knowledge derived from external sources. In this context, multinational companies can be seen as external sources of knowledge for host country firms.

Understanding of company’s capabilities to tap knowledge remains limited. Based on previous research in international business and strategy, we have identified three sets of factors that influence local firms’ knowledge absorption in the presence of a multinational corporation. Our hypothesis is that the knowledge absorption efficiency of a local company depends on internal capabilities, external sources of knowledge, as well as environmental conditions.

Combinative capabilities (CCs) are part of a firm’s internal capabilities which allow new combinations of resources (Kogut & Zander, 1992). We argue that firms with higher levels of CCs tend to be more efficient in absorbing knowledge. Furthermore, we argue that since multinationals are generally a source of external knowledge, the high levels of R&D of multinationals impact the local firms knowledge absorption efficiency. Nevertheless, it is suggested that the greater the uncertainty in the institutional environment, the lesser the efficiency of knowledge absorption by the local firm.

We used panel data analysis by fixed or random effects via Generalized Moments Method (GMM). We used annual data on varieties of protected plants from five local companies (four public companies and one private company) from 2003 to 2017. Dependent variables were considered the Knowledge absorption efficiency. The independent variables were combinative capabilities and the environmental conditions.

All the hypotheses were positive and significant, supporting our theory. The greater the combinative capabilities of local firms, the greater their knowledge absorption efficiency. The same for the R&D level of investment of the multinational partner and for the variable agricultural GDP (AGGDP), proxy for the environmental conditions of the host country.

We found evidence that the greater the combining ability of a company, the greater its knowledge absorption efficiency. In addition, our results indicate that the type of external knowledge absorbed and the host country context also affect the firm’s knowledge absorption efficiency. Public policies that promote a more credible corporate environment have implications for multinationals’ strategies that can positively impact local companies.

Kogut, B., & Zander, U. (1992). Knowledge of the firm, combinative capabilities and the replication of technology. Organization Science, 3(3): 383-396. Sheng, M. L. (2017). A dynamic capabilities-based framework of organizational sensemaking through combinative capabilities towards exploratory and exploitative product innovation in turbulent environments. Industrial Marketing Management, 65, 28-38.