ABSORPTIVE CAPACITY, STRATEGIC FLEXIBILITY AND INNOVATION PERFORMANCE ON SUSTAINABLE COMPETITIVE ADVANTAGE: AN INTERNATIONALIZATION PERSPECTIVE

Abstract

In recent years, the investment of emerging economies has soared, and more and more emerging economies firms (EEFs) have embarked on the process of internationalization. The data points one of the major development trends of the global economy, once an emerging economy that has been invested heavily and hoped to reap rapid growth in profits by multinational companies, it has become a source of investment funds and a competitor with the United States and Europe in terms of foreign investment. The overseas development of EEFs is faced with many problems, how to maintain sustainable competitiveness is the primary problem faced by enterprises. In the era of the knowledge economy, knowledge absorptive capacity plays a vital role in the innovation and long-term development of enterprises. However, in the academic field, the exploration of EEFs’ internationalization is still very few, many scholars have focused on absorptive capacity in recent years, mainly around the technology spillover effect of investment from developed countries to developing countries, while lacking theoretical basis and guidance on the use of absorptive capacity by emerging economies firms (EEFs). This study aims to explore the mechanism and effect extent of absorptive capacity on sustainable competitive advantage, noting the mediating roles of strategic flexibility and innovation performance, the moderating roles of environmental uncertainty.

The first objective of this study is to link absorptive capacity, strategic flexibility, innovation performance, and sustainable competitive advantage together into a complete framework. The second objective of the study is to apply the theory of absorptive capacity to a new study field. Data analysis was conducted by using IBM SPSS statistics 23 and IBM SPSS AMOS 23 to a sample of 404 Chinese overseas firms. Firstly, data analysis tested the conceptual model by establishing the convergent and discriminant validity of variables and tested all proposed hypotheses by using IBM SPSS. Secondly, Covariance Based Structure Equation Model (CB-SEM) was applied to test the model fit by using IBM SPSS AMOS. This study applied SPSS to test all proposed hypotheses to explore the relationship between one dependent variable, two independent variables, two mediators, one moderator, and six control variables. The study found that the two dimensions of absorptive capacity have significant but different effects on sustainable competitive advantage, potential absorptive capacity has a significant impact on sustainable competitive advantage, however, realized absorptive capacity did not it; there are significant correlations among other variables; strategic flexibility has no significant mediating effect between potential absorptive capacity and innovation performance, the mediating effects of other variables are significant and positive; the moderating effects are significant but negative; among the control variables, only R&D intensity and industry category have a significant impact.

The results verify the mechanism of absorptive capacity affecting sustainable competitive advantages, providing a new theoretical basis for EEFs, expanding the application areas of absorptive capacity while enriching the connotation of internationalization theory. Also, from the perspective of enterprise management implication, it provides a theoretical basis for the improvement of overseas competitiveness of EEFs, points out the importance of cultivating and improving organizational absorptive capacity, and strengthening the strategic flexibility of organizational, which has a certain incentive effect on innovation. According to research data, innovation has a greater impact on corporate competitiveness, which means that innovation plays a very important role in sustainable competitiveness. At the same time, the impact of environmental uncertainties cannot be ignored, and a risk control system can be formulated to reduce various losses caused by this.

Keywords：absorptive capacity, strategic flexibility, innovation performance, sustainable competitive advantage, internationalization