Technological Innovation vs Technological Backwardness Prospects in Latecomer Firms: An Absorptive Capacity Perspective.

The purpose of this paper is to investigate the driving factors that constrain latecomer firms’ technological innovation, eventually leading to an incomplete or unsuccessful catching-up process. In this aim, we rely on the resource-based theory to advance an absorptive capacity argument and introduce a complementary explanation about the role of opportunity capture borrowed from the entrepreneurship perspective. We develop multiple mediation models and test our hypotheses on data collected from 166 manufacturing firms in Guangdong Province (China). Our findings show a complementary role played by weak knowledge transformation and opportunity capture attitudes. Overall, our work contributes to existing literature by providing theoretical arguments and empirical evidence about the role of function and relevance of each single dimension of absorptive capacity in studying innovation and the catching-up processes of latecomer firms. In addition, the work disentangles and substantiates a linkage between these dimensions and opportunity capture attitudes in determining sub-optimal outcomes of the catching-up process. Our findings offer also practical insights about the limitations of predominant innovation and catch-up strategies of latecomer firms and suggest the necessary shifts in policymaking.