Inter-organizational knowledge acquisition and firms' radical innovation: A moderated mediation analysis

Journal of Business Research 90 (2018) 295–306

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Inter-organizational knowledge acquisition and firms' radical innovation: A moderated mediation analysis☆

T

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Xuemei Xiea, , Lijun Wanga, Saixing Zengb a b

School of Management, Shanghai University, Shanghai 200444, China Antai School of Management, Shanghai Jiao Tong University, Shanghai 200052, China

A R T I C LE I N FO

A B S T R A C T

Keywords: Inter-organizational knowledge acquisition Realized absorptive capacity Knowledge ambiguity Radical innovation

Inter-organizational knowledge acquisition has become an increasingly important strategy for firms to improve their levels of innovation. Building upon the knowledge-based view (KBV) and the organizational learning perspective, and using data from 376 high-tech Chinese firms, we examine the underlying mediating mechanisms and contextual conditions in the relationship between inter-organizational knowledge acquisition and firms' radical innovation. Our results demonstrate that inter-organizational knowledge acquisition has a significant positive impact on firms' radical innovation. We also find that realized absorptive capacity mediates the relationship between inter-organizational knowledge acquisition and firms' radical innovation. Moreover, we discover that knowledge ambiguity negatively moderates both the direct and indirect effects of inter-organizational knowledge acquisition on firms' radical innovation through realized absorptive capacity. Our findings contribute to open innovation research by discussing the mediating mechanisms of how inter-organizational knowledge acquisition can be converted to firm innovation via realized absorptive capacity. Our results also provide fine-grained insight into the contingent role of knowledge ambiguity, and how its interaction with interorganizational knowledge acquisition and realized absorptive capacity can have profound effects on firms' innovativeness.

1. Introduction The knowledge-based view (KBV) highlights the facts that knowledge is the most strategically significant resource of a firm and that the ability to generate, combine, recombine, and exploit knowledge is essential to a firm's ability to innovate (Grant, 1996; Szulanski, Ringov, & Jensen, 2016; Wang, 2013). However, firms do not always have all the knowledge they require (Parra-Requena, Ruiz-Ortega, GarcíaVillaverde, & Rodrigo-Alarcón, 2015). To sustain a competitive advantage in dynamic industries where new knowledge emerges frequently, firms must continually generate flows of new knowledge in order to accumulate and renew their portfolio of knowledge stock (Lin & Wu, 2010). Rapidly transforming information technologies have brought about a situation in which the knowledge that a firm requires for innovation may be found outside of the firm's boundaries (Segarra-Ciprés, RocaPuig, & Bou-Llusar, 2014). In this vein, inter-organizational collaboration is increasingly seen as a means to broaden a firm's knowledge base and to create new and innovative knowledge combinations based on the

knowledge of partner firms (Björkman, Stahl, & Vaara, 2007). Accordingly, inter-organizational knowledge acquisition that is achieved through collaborative relationships has become a vital strategy for firms to obtain crucial technical knowledge and to conduct innovative advances, hence gaining a sustainable competitive advantage (Buckley, Glaister, Klijn, & Tan, 2009; Chen & Tan, 2016; Ho, Ghauri, & Larimo, 2017; Lyles & Salk, 2007; Parra-Requena et al., 2015). In recent years, the increasing importance of knowledge acquisition has triggered numerous studies on its antecedents and consequences. Some researchers focus on the antecedents affecting knowledge acquisition, such as internal research and development (R&D) (e.g., Denicolai, Ramirez, & Tidd, 2016), trust among partners (e.g., Geneste & Galvin, 2013), strategic orientation (e.g., Ma & Huang, 2016), and institutional distance (e.g., Ho et al., 2017). Other studies investigate the indirect role of knowledge acquisition, such as its mediating role (e.g., Chang, Bai, & Li, 2015; Ma & Huang, 2016; Parra-Requena et al., 2015). In addition, there is research that examines the consequences of knowledge acquisition, including the effect of knowledge acquisition on both firm performance and firm innovation (e.g., Denicolai et al., 2016;

☆ The authors thank two anonymous referees for their helpful and valuable suggestions. And the authors also gratefully acknowledge financial support from the National Natural Science Foundation of China (71472118, 71772118). ⁎ Corresponding author. E-mail addresses: [email protected] (X. Xie), [email protected] (L. Wang), [email protected] (S. Zeng).

https://doi.org/10.1016/j.jbusres.2018.04.038 Received 14 May 2017; Received in revised form 27 April 2018; Accepted 28 April 2018 0148-2963/ © 2018 Elsevier Inc. All rights reserved.

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mediation model, we provide a better understanding of the contingent role of knowledge ambiguity by identifying how its interaction with inter-organizational knowledge acquisition and realized absorptive capacity may affect firms' radical innovation. The remainder of this paper is organized as follows. Section 2 discusses the development of our theoretical hypotheses. Section 3 describes the variables and the data. Section 4 provides our empirical findings. Finally, in Section 5, we present our theoretical contributions, managerial implications, the limitations of this research, and possible future research directions.

Liao & Marsillac, 2015). Yet, little research has offered a comprehensive perspective on the effectiveness of knowledge acquisition through interorganizational collaboration. Although some conceptual and qualitative studies link knowledge acquisition from external sources to firm innovation (e.g., Arvanitis, Lokshin, Mohnen, & Wörter, 2015; Chen & Huang, 2009; Liao & Marsillac, 2015; Pattinson & Preece, 2014; Sullivan & Marvel, 2011; Yli-Renko, Autio, & Sapienza, 2001; Zhou & Li, 2012), a systematic overview of the underlying mechanisms and contextual conditions of the relationship between inter-organizational knowledge acquisition and firms' innovativeness is still lacking. These gaps in the literature limit our understanding of the true contribution of inter-organizational knowledge acquisition to firms' innovativeness. One particular research gap is that it has remained unclear how the technological knowledge that a firm obtains from its partners contributes to the firm's radical innovation. Although technical knowledge acquired via collaboration is critical for enhancing firm innovation (Frankort, 2016), this does not mean that that knowledge can be used automatically or efficiently by the receiving firm (Vanhaverbeke & Cloodt, 2014). Therefore, knowledge acquisition is necessary but not sufficient to turn the newly acquired knowledge into marginally improved products or services (Limaj & Bernroider, 2017). Although previous literature indicates that knowledge acquisition has a positive effect on firms' innovation output (e.g., Frankort, 2016; Kotabe, Jiang, & Murray, 2011), the studies do not examine what internal mechanisms might be involved in this relationship. Given that the different impacts of external knowledge on innovation depend on the capabilities of firms to apply this knowledge (viz., realized absorptive capacity) (FerrerasMéndez, Fernández-Mesa, & Alegre, 2016; Kotabe et al., 2011; Lin, Zeng, Liu, & Li, 2016), we argue that the inclusion of realized absorptive capacity as a mediating factor may provide most of the explanatory power of radical innovation and, further, that it can clarify the weakness of the effect that is directly attributed to inter-organizational knowledge acquisition. A second gap in the literature concerns the context of when the external knowledge to be transferred is ambiguous or not made explicit. In these cases, it is unclear whether the external knowledge from partners contributes to a firm's radical innovation. Knowledge ambiguity, as an essential knowledge characteristic, is a fundamental factor to be considered in the process of knowledge management (Law, 2014; Simonin, 2004; van Wijk, Jansen, & Lyles, 2008). Accordingly, knowledge ambiguity becomes an inherent and intractable challenge for both inter-organizational knowledge acquisition and transformation processes (Fang, Yang, & Hsu, 2013; Narteh, 2008). Hence, knowledge ambiguity determines the context of when external knowledge can effectively be transformed into firm innovation. Given that previous work fails to take sufficient account of the challenges in applying external knowledge (Robertson, Casali, & Jacobson, 2012), we aim to integrate the impact of knowledge ambiguity in our research model to examine whether the relationship between inter-organizational knowledge acquisition and radical innovation varies across the levels of knowledge ambiguity. Based on the above research gaps, we propose that the effect of inter-organizational knowledge acquisition on radical innovation must be considered together with a firm's realized absorptive capacity, based on the contingent role of knowledge ambiguity. Thus, this study examines how realized absorptive capacity and knowledge ambiguity may condition the effect of the inter-organizational knowledge acquisition on firms' radical innovation. At the inter-organizational-collaboration level, we contribute to open innovation research by identifying the integration mechanisms of how inter-organizational knowledge acquisition can be exploited to promote firms' radical innovation through the role of realized absorptive capacity. Moreover, using a moderated

2. Theoretical development and hypotheses 2.1. Inter-organizational knowledge acquisition and radical innovation Faced with the knowledge-intensive business environment, firms are urged to leverage inter-organization relationships to actively acquire new knowledge from beyond their own organizational boundaries in order to develop new knowledge with partners and to effectively promote innovation output (Ahuja & Katila, 2001; Cassiman & Veugelers, 2006; Chung & Yeaple, 2008; Morgan & Berthon, 2008). Here, inter-organizational knowledge acquisition is defined as the interactive and iterative processes of firms to acquire new technology and know-how from external sources and partners (Liao & Marsillac, 2015; Zahra & George, 2002). Inter-organizational knowledge acquisition generally includes various sources, ranging from contract-based agreements, such as licenses, patents, and technological assistance, to equity-based arrangements, such as strategic alliances and joint ventures (Almeida, Dokko, & Rosenkopf, 2003; Simonin, 1999; Zhang, Shu, Jiang, & Malter, 2010). Radical innovation is defined as the fundamental changes in a firm's technological trajectory, which involves the development of new products, services, or production processes for new customers or emerging markets (Benner & Tushman, 2003; Song & Thieme, 2009). According to KBV, a firm's knowledge base affects its scope and capacity to comprehend and apply novel knowledge to radical innovation (Hill & Rothaermel, 2003). Given that no firm possesses all necessary resources internally and that it is imprudent to undertake all innovation activities alone (Lin et al., 2016), acquiring external knowledge becomes an advantageous approach to inspire radical innovation. In this vein, interorganizational knowledge acquisition, which can help a firm obtain and accumulate external knowledge and expand their knowledge pool to pursue innovation (Cui, Griffith, & Cavusgil, 2005; Kotabe et al., 2011), is recognized as fundamental for improving a firm's radical innovation. On the one hand, inter-organizational knowledge acquisition can help firms access their partners' broad knowledge-based resources and capabilities, which may enhance the breadth and depth of a firm's knowledge base (Liao & Marsillac, 2015). Thus, inter-organizational knowledge acquisition can help firms gain multi-channel access to new external knowledge and new technologies, enabling them to better utilize existing knowledge (Chang et al., 2015). Given that inter-organizational knowledge acquisition plays an important role in the creation of new knowledge (Julien, Andriambeloson, & Ramangalahy, 2004), a broad knowledge base can facilitate a firm's understanding of new information and potential changes, reduce their innovation expenditures, and enhance their ability to detect remote technological or market opportunities for radical innovation (Chesbrough, 2006). On the other hand, as a collaborative process is composed of an extensive knowledge flow among the employees of different partners (Ma & Huang, 2016), the knowledge acquired from outside partners enables employees within a firm to deepen their thinking and to advance their innovative ideas (Chang et al., 2015), which can then have

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2016). On the one hand, a firm's realized absorptive capacity, which plays an important role in assimilating and exploiting newly acquired knowledge (Rangus & Slavec, 2017), may enable that firm to make full effective use of the heterogeneity of the knowledge to improve its knowledge stock and gain maximal value from that knowledge, thus aiding it in generating innovative thinking. On the other hand, a firm's realized absorptive capacity can facilitate its radical innovation by exploiting externally-acquired knowledge in its organizational routines, thereby transforming the external knowledge and combining it with its existing internal knowledge successfully (Kotabe et al., 2011; Ritala & Hurmelinna-Laukkanen, 2013). Overall, inter-organizational knowledge acquisition enables a firm to generate radical innovation via the role of realized absorptive capacity, stimulating the combination of existing and newly acquired knowledge. Therefore, inter-organizational knowledge acquisition with a high level of realized absorptive capacity will have a positive effect on firms' radical innovation. Hence, we propose that:

the effect of promoting their firm's radical innovation. Furthermore, the knowledge acquired via external collaborative relationships directly enriches a firm's pool of technological knowledge relevant to the development activities (Frankort, 2016), thus increasing the willingness and capability of a firm to support the creativity, experimentation, and development of new ideas and new innovations (Yli-Renko et al., 2001). In summary, it is clear that greater inter-organizational knowledge acquisition is beneficial to improve firms' radical innovation. Based on the above discussion, we propose the following: H1. The extent of a firm's inter-organizational knowledge acquisition will be positively related to its level of radical innovation. 2.2. The mediation effect of realized absorptive capacity Although prior literature highlights the role of external knowledge acquisition in enhancing a firm's innovativeness (e.g., Chang et al., 2015; Frankort, 2016), the mere acquisition of this knowledge is not sufficient to ensure that the external knowledge can be assimilated into the firm's knowledge base (Roberts, 2015). A successful transformation of external knowledge into substantive innovation requires effective knowledge integration (Lin et al., 2016). Thus, inter-organizational knowledge acquisition can be seen as a necessary but still insufficient condition for radical innovation. According to the organizational learning perspective, a firm's innovation output depends on its realized absorptive capacity, defined as a firm's ability to exploit externallygenerated knowledge, to transform it, and to apply it commercially to that create higher firm value (Argote, McEvily, & Reagans, 2003; Zahra & George, 2002). Consequently, both inter-organizational knowledge acquisition and a firm's realized absorptive capacity are vital components for improving radical innovation. Thus, given that the impact of inter-organizational knowledge acquisition on firms' innovation may differ, contingent on the capabilities of the firms to transfer and apply that knowledge to their own innovation processes (Leiponen & Helfat, 2010; Lin et al., 2016), we argue that realized absorptive capacity can serve as an intermediate process through which inter-organizational knowledge acquisition affects firms' radical innovation levels. First, we posit that a firm's inter-organizational knowledge acquisition will be related to its level of realized absorptive capacity. In this respect, inter-organizational knowledge acquisition functions as a key antecedent for a firm's realized absorptive capacity (de Araújo Burcharth, Lettl, & Ulhøi, 2015; Jansen, Van Den Bosch, & Volberda, 2005; Zahra & George, 2002). For example, using a sample of 467 Spanish manufacturing firms, Ferreras-Méndez et al. (2016) indicate that external knowledge acquisition contributes to firms' absorptive capacity. More specifically, inter-organizational knowledge acquisition can help companies gain multi-channel access to new knowledge and new technologies (Chang et al., 2015). Thus, this process can promote internal knowledge-based resource renewal while enhancing a firm's knowledge base (Ho et al., 2017; Liao & Marsillac, 2015), which then further strengthens the firm's realized absorptive capacity. Second, we posit that a high level of realized absorptive capacity is beneficial for a firm's radical innovation. To develop radical innovations, companies need to generate breakthrough ideas and transform them into commercial products through resource utilization (Zhou & Li, 2012). According to KBV, a firm's knowledge base represents its most important resource for radical innovation (Zhou & Wu, 2010). However, acquiring more external knowledge does not automatically ensure the generation of new ideas or new innovations (Zhang et al., 2010). Prior work suggests that absorptive capacity contributes either directly or indirectly to a firm's innovation (e.g., Limaj & Bernroider, 2017; Xie, Zou, & Qi, 2018). Thus, the successful utilization of external knowledge from partners relies heavily on firms' absorptive capacities (Lin et al.,

H2. A firm's realized absorptive capacity mediates the relationship between inter-organizational knowledge acquisition and its radical innovation.

2.3. The moderating effect of knowledge ambiguity Knowledge, which is understood as an intangible asset, and which is hard to substitute or replicate, is usually characterized by its ambiguity (Fang et al., 2013; Simonin, 2004). Knowledge ambiguity refers to the inherent and irreducible uncertainty of precisely what the underlying knowledge components and sources are, as well as how they may interact (van Wijk et al., 2008). Generally, knowledge ambiguity is seen as a multidimensional construct that includes the simultaneous effects of the tacitness, specificity, and complexity of the underlying knowledge to be transferred (Law, 2014; Simonin, 2004). Hence, knowledge ambiguity may trigger barriers to the acquisition, transfer, or assimilation of knowledge from external partners. Given that the impact of inter-organizational knowledge acquisition on firms' radical innovation may differ substantially—depending on the characteristics of the knowledge, such as its ambiguity—we posit that when knowledge acquired from collaborative partners is tacit, specific, and complex, the positive relationship between inter-organizational knowledge acquisition and firms' radical innovation will be weaker. First, knowledge ambiguity leads to an uncertainty barrier for firms during the knowledge acquisition process (Fang et al., 2013). Particularly, some partners' technology know-how is a complicated combination of many interdependent techniques, routines, capabilities, and resources, which may inhibit the acquisition of knowledge. Second, a high level of knowledge ambiguity means that knowledge exists in semi-structured form alongside more complex and tacit knowledge (King, 2007; Lakshman, Kumra, & Adhikari, 2017; van Wijk et al., 2008); this makes the knowledge base less effective in creating innovation than states of lower ambiguity (Lakshman et al., 2017), hence decreasing the likelihood of transferring external knowledge into new ideas or new products and limiting the generation of radical innovation via external knowledge. Third, knowledge ambiguity may mitigate the mobility of knowledge and constrain the ability of assimilated knowledge to generate performance (Law, 2014). Therefore, it is clear that higher knowledge ambiguity is not beneficial to knowledge acquisition, mobility, or transfer, and thus, will weaken the role of inter-organizational knowledge acquisition in promoting radical innovation. Hence, we propose that: H3. Knowledge ambiguity negatively moderates the direct effect of inter-organizational knowledge acquisition on firms' radical innovation,

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acquisition on radical innovation through realized absorptive capacity. Integrating the mediating and moderating effects into the relationship between inter-organizational knowledge acquisition and radical innovation, we put forward a moderated mediation hypothesis:

such that the effect will be weaker when the knowledge ambiguity is greater. Inter-organizational knowledge acquisition is a highly complex undertaking, as it depends on knowledge features like ambiguity (Li, Cui, & Liu, 2017). In brief, knowledge ambiguity encapsulates the degree of the transference of many different things, including information, know-how, competence, knowledge, or skills (Simonin, 2004). When knowledge is ambiguous, it is more difficult to transfer (Lakshman et al., 2017; Lee, Chang, Liu, & Yang, 2007). Given that the relationship between inter-organizational knowledge acquisition and realized absorptive capacity can vary, depending on the level of knowledge ambiguity, we posit that when external knowledge acquired from collaborative partners is ambiguous, the positive relationship between the inter-organizational knowledge acquisition and the realized absorptive capacity will be weaker. First, knowledge ambiguity means that the knowledge is difficult to codify and understand for the recipients (Argote et al., 2003). A collaborative partner's know-how usually contains elements that are tacit and complex, thus making it more difficult for outside firms to acquire, transfer, and exploit that knowledge easily (Lane, Salk, & Lyles, 2001; Simonin, 1999). Second, a higher level of knowledge ambiguity requires firms to involve more professional fields (Simonin, 2004), which increases the “stickiness” of the knowledge and makes the causal connections harder to decipher, hence imposing the additional costs of transferring and exploiting the knowledge (Lee et al., 2007; Scaringella & Burtschell, 2017; Uygur, 2013). Therefore, we see that higher knowledge ambiguity is not beneficial for firms because it serves as a major obstacle to turn newly acquired external knowledge into internal knowledge stock and realized absorptive capacity. Thus, knowledge ambiguity negatively moderates the relationship between inter-organizational knowledge acquisition and realized absorptive capacity. As stated above, a firm's realized absorptive capacity mediates the relationship between inter-organizational knowledge acquisition and radical innovation, and knowledge ambiguity negatively moderates both the direct and indirect effects of inter-organizational knowledge

H4. Knowledge ambiguity negatively moderates the indirect effect of inter-organizational knowledge acquisition on firms' radical innovation via realized absorptive capacity, such that the effect will be weaker when the knowledge ambiguity is greater. Grounded in KBV (Kogut & Zander, 1992) and the organizational learning perspective (Argote, 1999), we develop an integrative moderated-mediation model positing inter-organizational knowledge acquisition as an antecedent of radical innovation through the mediating role of realized absorptive capacity. Additionally, we propose that knowledge ambiguity negatively moderates both the direct and indirect effects of inter-organizational knowledge acquisition on firms' radical innovation through realized absorptive capacity. The conceptual model is shown in Fig. 1.

3. Methods 3.1. Data source The data in this study was collected using a survey method from a transition economy—China. In the survey, we chose the manufacturing companies of high-tech industrial sectors located in 16 cities in the Yangtze Delta Region of China, including Shanghai, Jiangsu Province, and Zhejiang Province, where the most developed Chinese manufacturing industries are located. Following prior studies (Li et al., 2017), we pretested the survey instrument with a small group of managers (i.e., senior managers and R&D managers) in 30 different companies. The respondents were asked to review the questionnaire regarding its readability, ambiguity, structure, and completeness (Dillman, 1978). We then modified the instrument according to the feedback we received from the managers. We then conducted the full survey: 1500

Knowledge ambiguity

H3 (Moderation effect)

Inter-organizational knowledge acquisition

H1 (Direct effect)

Radical innovation

H4 (Moderated mediation effect)

Realized absorptive capacity H2 (Mediation effect) Control variables Ownership

Annual turnover

Firm age

Fig. 1. Conceptual model.

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questionnaires were sent to high-tech manufacturing firms that were randomly selected using a stratified random sample method based on size (four size types) and industry category (seven high-tech sectors). The questionnaires were mainly sent to senior and middle managers, R &D managers, and R&D project leaders who had rich experiences in inter-organizational knowledge acquisition and innovation processes. A total of 376 valid responses were returned, yielding a response rate of 25.07%. We examined the non-response bias using the process recommended by Armstrong and Overton (1977). We also compared the responses received from the field research with those obtained via email. The mean differences of all the responses were tested on all multiple-item scales. The results revealed no significant differences (p > 0.05), suggesting that non-response bias was not a concern.

& Amores-Salvadó, 2016). 3.3.1. Dependent variable There are many studies that refer to the measurement of radical innovation (e.g., Forés & Camisón, 2016; Subramaniam & Youndt, 2005). However, various innovative strategies have led to divergent radical innovation measurements. In our work, radical innovation was measured using a scale developed by Delgado-Verde et al. (2016), which captured the number of completely new innovations, their importance as a source of obsolescence for previous ones, and the percentage of sales deriving from the new radical innovations. The respondents were required to note the degree to which they agreed with various statements regarding their companies' radical innovation in the prior three years compared with that of their competitors (see Table 1). The items for the constructs were assessed using a seven-point Likert scale, ranging from 1 = “strongly disagree” to 7 = “strongly agree.”

3.2. The sample The characteristics of the sample, including ownership, size, age, annual turnover, R&D expenditure intensity, and R&D personnel intensity, are found in Table A1 in the Appendix. In terms of ownership, approximately 41.49% of the firms were private enterprises. Regarding size, 44.95% of the firms ranged from 20 to 300 employees. Concerning age, 65.42% of the firms had been operating in a related industry for more than five years. In terms of annual turnover, the category 3–20 million yuan accounted for 38.83% of the total. As it pertained to R&D expenditure intensity, approximately 47.61% of the firms were ‘over 5%’. Lastly, regarding R&D personnel intensity, about 47.35% of the firms were ‘over 5%’.

3.3.2. Independent variable Adapted from Jansen et al. (2005) and Ma and Huang (2016), interorganizational knowledge acquisition, capturing the extent to which a firm acquires knowledge from its partners, was measured using four items, including the extent of their partners' technology know-how, visiting their partners, collecting industry information through informal means with their partners, and organizing special meetings with their partners. Previous research has adopted various measures to assess a firm's absorptive capacity, such as its R&D spending (Rothaermel & Alexandre, 2009) or its learning processes (Ferreras-Méndez et al., 2016). Using a scale developed by Kotabe et al. (2011), we measured a firm's realized absorptive capacity by four items, including a firm's capacity to transform acquired new knowledge to fit its development needs; its ability to develop new products, services, or applications using the assimilated new knowledge; its capability to fuse the assimilated new knowledge with its existing knowledge; and its aptitude to revise manufacturing processes, business procedures, or quality-

3.3. Measures In this study, items were measured on a seven-point scale, based on existing items in the literature, including inter-organizational knowledge acquisition (Jansen et al., 2005; Ma & Huang, 2016); realized absorptive capacity (Kotabe et al., 2011); knowledge ambiguity (Lee et al., 2007); and radical innovation (Delgado-Verde, Martín-de Castro, Table 1 Construct measurement and confirmatory factor analysis. Constructs

Inter-organizational knowledge acquisition (Jansen et al., 2005; Ma & Huang, 2016) (Cronbach's α = 0.827; CR = 0.829; AVE = 0.549) KA1. Your company has learned a great deal about the technology know-how held by your partners.a KA2. Your company regularly visits your partners (e.g., suppliers and customers) to acquire new knowledge.b KA3.Your company regularly collects industry information through informal means (e.g., lunches with industry friends).b KA4. Your company periodically organizes special meetings with partners to acquire new knowledge.b Realized absorptive capacity (Kotabe et al., 2011) (Cronbach's α = 0.837; CR = 0.809; AVE = 0.515) AC1. Your company has the capability to adapt acquired new knowledge to fit the firm's development needs. AC2. Your company has the capability to develop new products/services/applications by using assimilated new knowledge. AC3. Your company has the capability to fuse assimilated new knowledge with existing knowledge. AC4. Your company has the capability to revise manufacturing processes/business procedures/quality control operations based on acquired new knowledge. Knowledge ambiguity (Lee et al., 2007) (Cronbach's α = 0.761; CR = 0.760; AVE = 0.515) AM1. Your partners' technology and process know-how is more tacit than explicit, so it is difficult to codify. AM2. Your partners' technology and process know-how is a complicated combination of many interdependent techniques, routines, capabilities, and resources. AM3. To develop partners' technology and process know-how, your company has had to invest significantly in specialized equipment, facilities, and skilled human resources. Radical innovation (Delgado-Verde et al., 2016) (Cronbach's α = 0.874; CR = 0.852; AVE = 0.657) RI1. The number of entirely new innovations developed by your company in last three years is higher than the number developed by your competitors. RI2. Your company develops innovations that render existing technology obsolete or drastically changes it. RI3. The percentage of sales for radical innovations introduced by your company in last three years is higher than that of your competitors. Model fit index χ2/df = 4.426; p = 0.000; CFI = 0.911; IFI = 0.912; GFI = 0.898; RMSEA = 0.079

Significance level: ⁎p < 0.05; ⁎⁎p < 0.01; ⁎⁎⁎p < 0.001; CR: construct reliability; CITC: corrected item-total correlation. a Item adapted from Ma and Huang (2016). b Item adapted from Jansen et al. (2005).

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CITC

Factor loading

t-Value

0.677 0.670 0.658 0.699

0.75 0.70 0.78 0.73

13.699 12.454 13.690 16.141

0.653 0.696 0.697 0.627

0.71 0.73 0.74 0.69

11.105 12.438 12.045 14.637

0.549 0.620

0.69 0.76

12.230 10.746

0.526

0.70

10.458

0.713

0.84

20.130

0.703 0.698

0.83 0.76

18.655 15.641

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greater than the correlation coefficients in the same lines and columns, thus proving satisfactory results for the discriminant validity. According to Podsakoff, MacKenzie, Lee, and Podsakoff (2003), the use of perceptual data collected by the survey method may have the concern of common method variance (CMV). Therefore, we used particular methods to reduce potential CMV. First, for process control, to reduce the possible fear of the respondents, we explained to those surveyed that the questionnaire was anonymous. Second, we had independent variables and dependent variables in different locations on the questionnaire. Third, we aimed to make the survey statements as simple, clear, and easy to understand as possible. For the statistical control, we conducted a Harman's single-factor test; the results showed that the first factor accounted for 39.68% of the total variance, suggesting that CMV was not a concern (Podsakoff & Organ, 1986).

control operations based on the acquired new knowledge. Adapted from Lee et al. (2007), who discussed knowledge ambiguity as a multidimensional construct consisting of three subconstructs—tacitness, complexity, and specificity—in our work, firms' knowledge ambiguity was measured using three items: partners' technology and process know-how that is tacit and difficult to codify; partners' technology and process know-how that is a complicated combination of many interdependent techniques, routines, capabilities, and resources; and each company's significant investment in specialized equipment, facilities, or skilled human resources to develop their partners' technology and process know-how. In this investigation, the respondents were required to note the degree to which they agreed with various statements regarding their companies' inter-organizational knowledge acquisition, realized absorptive capacity, and knowledge ambiguity. The items for the constructs were assessed using the same seven-point Likert scale discussed above, ranging from 1 = “strongly disagree” to 7 = “strongly agree.” The measurement scales used in this study are presented in Table 1.

4. Results Table 2 presents the means, standard deviations, and correlation coefficients of the variables we examined. The results indicated that inter-organizational knowledge acquisition, realized absorptive capacity, and knowledge ambiguity were significantly correlated with firms' radical innovation. Table 3 presents the findings of the mediating effect of the realized absorptive capacity using the method proposed by Baron and Kenny (1986). Models 1 and 4 included only the controls while Models 2 and 5 added the main effect of inter-organizational knowledge acquisition. The results of Model 2 suggested that inter-organizational knowledge acquisition was positively related to firms' radical innovation (b = 0.749, p < 0.001). Therefore, H1 is supported. The results of Model 5 indicated that inter-organizational knowledge acquisition was positively related to firms' realized absorptive capacity (b = 0.670, p < 0.001). The results of Model 3 indicated that a firm's realized absorptive capacity was also positively related to its radical innovation (b = 0.420, p < 0.001). Moreover, the results of Model 3 showed that when the variable of realized absorptive capacity was added to Model 2, the regression coefficients of the explanatory variables remained statistically significant but became somewhat smaller than those of Model 2 (b = 0.468 < 0.749, p < 0.001). Hence, the results indicated that realized absorptive capacity partially mediated the relationship between inter-organizational knowledge acquisition and firms' radical innovation. Therefore, H2 is supported. The regression results of the “PROCESS” (Hayes, 2013) are shown in Table 4. To reduce the potential concern of multicollinearity, we used the mean-centralized moderator to create the interaction terms. The results revealed that inter-organizational knowledge acquisition, knowledge ambiguity, and their interaction were all positively related to realized absorptive capacity (b = 0.534, 0.184, and −0.057; p < 0.001, 0.001, and 0.05, respectively). Additionally, inter-organizational knowledge acquisition, knowledge ambiguity, realized absorptive capacity, and their interaction were all positively related to

3.3.3. Controls Similar to Sheng and Chien (2016) and Subramaniam and Youndt (2005), we used ownership, annual turnover, firm age, and firm size as control variables. Ownership was assessed using four types: (a) stateowned enterprises (SOEs); (b) collectively-run enterprises (CREs); (c) private enterprises (PEs); and (d) foreign-invested enterprises (FIEs). Annual turnover was measured on a four-item scale: 1 = ‘ < 3 million yuan’ to 4 = ‘ > 400 million yuan’. Firm age was measured on a fiveitem scale: 1 = ‘ < 3’ to 5 = ‘ > 15’. Lastly, firm size was assessed by the number of employees, using a four-item scale: 1 = ‘ < 20’ to 4 = ‘ > 1000’. 3.4. Reliability, validity, and common method variance We took several steps to ensure data validity and reliability. First, in our questionnaire, we used previously validated measurement items to ensure the validity of our measures. We assessed the reliability of the multi-item constructs with Cronbach's alpha and corrected item-total correlation (CITC). As shown in Table 1, the results revealed that the Cronbach's alpha values of the individual constructs were > 0.7 and that the CITC values were generally > 0.5, thus indicating an acceptable level of reliability. Second, we conducted a confirmatory factor analysis to evaluate the convergent and discriminant validity of the multi-item constructs. The results, seen in Table 1, showed that the model fit the data well. Table 1 also shows that all factors loaded significantly on their corresponding latent construct, that the construct reliability (CR) was > 0.7, and that the average variance extracted (AVE) values of all the variables were greater than the threshold value of 0.50, all of which provided evidence for the convergent validity. Moreover, the results shown in Table 2 suggested that the square roots of the AVE values in the diagonal were Table 2 Results of correlation analysis. Variables

Means

S.D.

1

2

3

4

5

6

7

8

1. 2. 3. 4. 5. 6. 7. 8.

2.516 2.348 3.160 2.518 5.047 4.871 5.123 5.123

1.103 1.022 1.274 0.918 1.198 1.236 1.109 1.310

1.000 −0.106⁎ −0.235⁎⁎ −0.141⁎⁎⁎ 0.062 −0.017 0.110⁎⁎ 0.112⁎

1.000 0.496⁎⁎ 0.688⁎⁎⁎ 0.207⁎⁎ 0.096 0.115⁎⁎ 0.058

1.000 0.545⁎⁎⁎ 0.055 0.039 0.039 −0.012

1.000 0.188⁎⁎⁎ 0.065 0.077 0.056

0.741 0.555⁎⁎ 0.715⁎⁎⁎ 0.671⁎⁎

0.718 0.550⁎⁎⁎ 0.556⁎⁎

0.718 0.658⁎⁎⁎

0.811

Ownership Annual turnover Firm age Firm size Inter-organizational knowledge acquisition Knowledge ambiguity Realized absorptive capacity Radical innovation

Significance level: ⁎p < 0.05; ⁎⁎p < 0.01 (two-tailed). The data of the diagonal (in italics) are the square root of AVE (average variance extracted) of the construct.

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Table 3 Results of OLS regression for the mediating effects of realized absorptive capacity. Variables

DV: radical innovation

Controls Ownership Annual turnover Firm age Firm size Predictors Inter-organizational knowledge acquisition Realized absorptive capacity R2 Adjusted R2 F-value Durbin-Watson

Significance level: ⁎p < 0.05;

⁎⁎

p < 0.01;

DV: realized absorptive capacity

Model 1

Model 2

Model 3

Model 4

Model 5

0.137⁎⁎ (0.063) 0.063 (0.093) −0.044 (0.066) 0.089 (0.107)

0.073 (0.047) −0.084 (0.069) 0.012 (0.049) −0.036 (0.080)

0.044 (0.044) −0.083 (0.065) −0.011 (0.046) 0.005 (0.075)

0.126⁎⁎ (0.053) 0.129⁎ (0.078) 0.004 (0.055) 0.013 (0.090)

0.069⁎ (0.037) −0.002 (0.055) 0.053 (0.039) −0.099 (0.064)

0.749⁎⁎⁎ (0.043)

0.468⁎⁎⁎ (0.058) 0.420⁎⁎⁎ (0.061) 0.522 0.515 67.294⁎⁎⁎ 2.063

0.020 0.009 1.865⁎ 1.943

0.462 0.454 63.462⁎⁎⁎ 2.024

Table 6 Conditional indirect effect of inter-organizational knowledge acquisition on radical innovation through realized absorptive capacity moderated by knowledge ambiguity.

Realized absorptive capacity

Radical innovation

0.070⁎ (0.036) −0.003 (0.053) 0.038 (0.037) −0.076 (0.061)

0.054⁎ (0.043) −0.085 (0.063) −0.021 (0.045) 0.021 (0.073)

0.534

⁎⁎⁎

(0.040)

0.184 (0.038) −0.057⁎⁎ (0.020)

0.751 68.008⁎⁎⁎

⁎⁎⁎

0.387

Mediator

Realized absorptive capacity

(0.581)

0.204 (0.046) −0.056⁎⁎⁎ (0.024) 0.322⁎⁎⁎ (0.062) 0.745 57.327⁎⁎⁎

Low (−1 SD) Middle (0) High (+1 SD)

0.456 0.387 0.318

0.064 0.058 0.066

t

7.104 6.657 4.786

p

0.000 0.000 0.000

95% CI LL

UL

0.330 0.273 0.187

0.583 0.501 0.449

Low (−1 SD) Middle (0) High (+1 SD)

0.195 0.172 0.150

Boot SE

0.046 0.040 0.036

Boot 95% CI LL

UL

0.111 0.100 0.087

0.294 0.260 0.233

variance inflation factor (VIF) test. The results showed that all the VIFs of the variables were below the threshold value of 5.0; therefore, multicollinearity in our models was not a concern. Next, using the regression results in Table 4, we calculated the simple effects at both low and high levels of knowledge ambiguity. According to Edwards and Lambert (2007) and Sun, Pan, and Chow (2014), we bootstrapped 5000 samples and adopted the bootstrap estimates to construct bias-corrected confidence intervals (CIs) for all the significance tests in this study. The results, found in Tables 5 and 6, showed that when the level of knowledge ambiguity was low, interorganizational knowledge acquisition had both a direct effect (b = 0.456; p < 0.001) and an indirect effect on radical innovation via realized absorptive capacity (b = 0.195; 95% bias-corrected CI: [0.111, 0.294]). When the level of knowledge ambiguity was high, inter-organizational knowledge acquisition had both a direct effect (b = 0.318; p < 0.001) and an indirect effect on radical innovation via realized absorptive capacity (b = 0.150; 95% bias-corrected CI: [0.087, 0.233]). These results reveal that as the level of knowledge ambiguity increases, both the direct effect and the indirect effect become smaller, which is in line with both H3 and H4. Moreover, to further verify whether the indirect effect is affected by knowledge ambiguity, we tested whether the Boot CI of the index of the moderated mediation contained zero. The results, which are shown in Table 7, indicated that the moderated mediation effect was negative and had a non-zero probability (b = −0.018; 95% bias-corrected CI: [−0.039, −0.005]). Therefore, we can conclude that knowledge

Conditional direct effects SE

Conditional indirect effects of knowledge ambiguity

Note. Bootstrap resample = 5000. Conditions for moderator (knowledge ambiguity) are the mean and plus/minus one standard deviation from the mean. SE = standard error; CI = confidence interval; LL = lower limit; UL = upper limit; Estimates were calculated using the PROCESS macro.

Table 5 Conditional direct effect of inter-organizational knowledge acquisition on radical innovation at values of knowledge ambiguity.

Effect

Condition

Effect

Note. Table values are path estimates from the estimated model. Entries are unstandardized coefficient estimates. Standard errors in parentheses. Significance level: ⁎ p < 0.05. ⁎⁎ p < 0.01. ⁎⁎⁎ p < 0.001.

Condition

0.520 0.514 80.217⁎⁎⁎ 2.145

p < 0.001. Unstandardized coefficients reported. Standard errors in parentheses.

Dependent variables

Control Ownership Annual turnover Firm age Firm size Predictors Inter-organizational knowledge acquisition Knowledge ambiguity Inter-organizational knowledge acquisition⁎ knowledge ambiguity Realized absorptive capacity R2 F-statistic

0.029 0.018 2.722⁎⁎ 1.918

⁎⁎⁎

Table 4 Regression results of PROCESS. Path estimated

0.670⁎⁎⁎ (0.034)

Note. Bootstrap resample = 5000. Conditions for moderator (knowledge ambiguity) are the mean and plus/minus one standard deviation from the mean. SE = standard error; CI = confidence interval; LL = lower limit; UL = upper limit; Estimates were calculated using the PROCESS macro.

radical innovation (b = 0.387, 0.204, 0.322, and −0.056; p < 0.001, 0.001, 0.001, and 0.001, respectively). Moreover, to further exclude a multicollinearity concern regarding the variables, we conducted a

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Table 7 Results of moderated mediation analyses. Independent variable

Dependent variable

Inter-organizational knowledge acquisition

Moderator

Radical innovation

Mediator

Knowledge ambiguity

Index

Realized absorptive capacity

−0.018

Boot SE

0.009

Boot 95% CI LL

UL

−0.039

−0.005

Note. SE = standard error; CI = confidence interval; LL = lower limit; UL = upper limit.

0.8 0.7 95% Confidence brand

Radical innovation

0.6 0.5

95% CI upper limit

0.4 0.3

Point estimate

0.2 0.1

95% CI lower limit

0 1

2

3

4

5

6

7

Inter-organizational knowledge acquisition Fig. 2. Direct effect of inter-organizational knowledge acquisition (controlling for realized absorptive capacity), with 95% confidence bands.

all values of knowledge ambiguity. Then, also using the JohnsonNeyman technique, we plotted the conditional indirect effect of interorganizational knowledge acquisition on radical innovation via realized absorptive capacity with an accompanying 95% confidence and, based on the second-order variance, as shown in Fig. 3. The findings indicated that the indirect effects were significantly far from zero for all values of knowledge ambiguity. Overall, we found that inter-organizational knowledge acquisition demonstrated weaker direct effects on radical innovation when knowledge ambiguity was higher.

ambiguity not only negatively moderates the relationship between inter-organizational knowledge acquisition and firms' radical innovation but also negatively moderates the indirect effect of inter-organizational knowledge acquisition on radical innovation via realized absorptive capacity. Thus, both H3 and H4 are also supported. Following Preacher, Rucker, and Hayes (2007), we used the Johnson-Neyman technique and plotted the moderating effect of knowledge ambiguity on the relationship between inter-organizational knowledge acquisition and radical innovation. The results, found in Fig. 2, suggested that the direct effect was significantly far from zero for 0.45 0.4

95% Confidence brand Radical innovation

0.35 0.3 0.25 95% CI upper limit

0.2 0.15

Point estimate

0.1 95% CI lower limit 0.05 0 1

2

3

4

5

6

7

Knowledge ambiguity Fig. 3. The conditional indirect effect of inter-organizational knowledge acquisition on radical innovation via realized absorptive capacity versus the moderator (knowledge ambiguity), with 95% confidence bands.

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5. Discussion and conclusions

ideas and new innovations and inhibits the positive effect of inter-organizational knowledge acquisition on firms' radical innovation.

In recent years, open innovation has stressed the importance of inbound processes for sourcing and acquiring knowledge (Dahlander & Gann, 2010). The knowledge sources necessary to trigger radical innovation can increasingly be found outside the boundaries of a firm, with the firm's partners (Ahuja & Katila, 2001; von Hippel & Von Krogh, 2006). Accordingly, knowledge acquisition in inter-organizational collaboration has become an increasingly important way for firms to improve their radical innovation. However, the question of under what circumstances—as well as exactly how—external knowledge promotes innovation has been less clear. To bridge this gap, drawing on KBV and the organizational learning perspective, we developed an integrative model in which we examined how inter-organizational knowledge acquisition, realized absorptive capacity, and knowledge ambiguity jointly affect firms' radical innovation. Our work showed that inter-organizational knowledge acquisition has a significant positive impact on firms' radical innovation. This finding suggests that inter-organizational knowledge acquisition enables a firm to identify and acquire valuable external knowhow (Cohen & Levinthal, 1990), and thus, to continually expand and renew their existing knowledge base (Frankort, 2016; Jansen et al., 2005; Pacharapha & Vathanophas Ractham, 2012). This process, then, enables the firm to offer new products (Rusly, Sun, & Corner, 2015), thus contributing to their radical innovation. Moreover, this finding confirms that in the era of “open innovation,” firms increasingly rely on external sources for innovation by seeking a wider range of external knowledge and resources (Chesbrough, 2006), which become indispensable to increase a firm's knowledge pool for radical innovation. We also found that realized absorptive capacity partially mediates the relationship between inter-organizational knowledge acquisition and firms' radical innovation. Given that a firm with a broad knowledge base is more likely to detect remote technological or market opportunities to improve its radical innovation and to generate cutting-edge ideas and novel combinations of knowledge components (Chesbrough, 2006; Taylor & Greve, 2006), acquiring external knowledge becomes a complementary strategy for achieving firms' radical innovation. However, a precondition for firms to utilize external knowledge to obtain innovative opportunities is to have the capacity to exploit and internalize that external knowledge successfully (Ferreras-Méndez et al., 2016). In this respect, our findings revealed that a firm's realized absorptive capacity plays a critical role in assimilating and exploiting external knowledge (Kokshagina, Le Masson, & Bories, 2017; Lin et al., 2016), as well as in converting external knowledge acquired from partners into the development of radical innovation. Thus, we confirmed that realized absorptive capacity acts as an internal integration mechanism in the relationship between inter-organizational knowledge acquisition and firms' radical innovation by affecting how firms fully utilize the potential of external knowledge acquired from partners. Therefore, success in firms' knowledge acquisition and high levels of realized absorptive capacity enable them to fully utilize their heterogeneity to improve their knowledge base, and thus, to generate radical innovation. Moreover, our findings also revealed that knowledge ambiguity negatively moderates both the direct and indirect effects of inter-organizational knowledge acquisition on firms' radical innovation through realized absorptive capacity. These effects of inter-organizational knowledge acquisition on firms' radical innovation are weaker when knowledge ambiguity is greater. These findings imply that knowledge ambiguity derived from the tacitness, specificity, and complexity of knowledge (Law, 2014) makes acquired knowledge more difficult to transfer (Lakshman et al., 2017; Simonin, 2004; Uygur, 2013); this, then, decreases the potential for the development of new

5.1. Contributions Although the important role of inter-organizational knowledge acquisition for firm innovation is identified in the literature (e.g., Chang et al., 2015; Frankort, 2016; Lin et al., 2016), the underlying mechanisms regarding how and when it becomes effective for enabling firm innovation has not been made clear. We advance this line of inquiry by proposing that the impact of inter-organizational knowledge acquisition on firms' radical innovation depends on the levels of realized absorptive capacity and knowledge ambiguity. Thus, this study provides a better understanding of these mechanisms and the conditions under which inter-organizational knowledge acquisition could effectively promote radical innovation. Specifically, this study offers theoretical insights in three areas. First, our findings contribute to open innovation research by identifying the internal “black box” between inter-organizational knowledge acquisition and firm innovation from the perspective of realized absorptive capacity. Various studies focus on the antecedents of knowledge acquisition (e.g., Ho et al., 2017; Kavusan, Noorderhaven, & Duysters, 2016; Li, Poppo, & Zhou, 2010); the direct relationship between knowledge acquisition and performance (e.g., Denicolai et al., 2016); or knowledge acquisition and innovation (e.g., Andreeva & Kianto, 2011; Arvanitis et al., 2015; Liao & Marsillac, 2015). Yet, little research attempts to examine the internal integration mechanism in the relationship between inter-organizational knowledge acquisition and firm innovation. As a firm's realized absorptive capacity is seen as both a vital consequence of external knowledge acquisition and an antecedent of radical innovation (Jansen et al., 2005; Ritala & HurmelinnaLaukkanen, 2013), we adopted the organizational learning perspective to explain how externally-acquired knowledge might be exploited to promote firms' radical innovation by positing realized absorptive capacity as a crucial mediator in this relationship. Therefore, our findings unpack the reasons why the impact of inter-organizational knowledge acquisition on innovation has been inconclusive up to this point. Further, this study extends previous research on external knowledge sources and innovation (e.g., Lin et al., 2016; Zhou & Li, 2012) by providing a more nuanced understanding of how external knowledge and realized absorptive capacity jointly affect a firm's radical innovation. Moreover, our findings expand the current understanding of why some firms can utilize external knowledge while others cannot. Second, we theoretically and empirically examined the boundary conditions regarding how knowledge ambiguity moderates the processes of inter-organizational knowledge acquisition affecting firms' radical innovation. Inter-organizational knowledge acquisition is a complex challenge for firms, as the knowledge is usually ambiguous (Li et al., 2017). However, little research identifies the mechanism of why inter-organizational knowledge acquisition might fail. The limited understanding of this topic mainly lies in neglecting the contextual factors that condition the effectiveness of inter-organizational knowledge acquisition. Given that knowledge ambiguity is seen as a critical impediment in the previous literature on knowledge acquisition and transformation (e.g., Lee et al., 2007; Li et al., 2017; Uygur, 2013), by using a moderated mediation model, our findings revealed that the direct and indirect effects of inter-organizational knowledge acquisition on firms' radical innovation are weaker when knowledge ambiguity is greater. Hence, this view parallels the research of Fang et al. (2013), which states that knowledge ambiguity results in an uncertainty barrier for firms during the knowledge acquisition process. Yet, we extend the current understanding of the role of knowledge ambiguity by taking it as a crucial moderator in the relationship between inter-organizational

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managers should place greater emphasis on building their realized absorptive capacity. On the one hand, managers need to develop internal and external knowledge integration systems to effectively combine external knowledge with their firms' existing knowledge bases. On the other hand, managers should hold regular meetings to discuss potential approaches to exploit new external knowledge for firm innovation. Overall, our findings suggest that continually acquiring external knowledge and updating internal knowledge stock are excellent solutions for improving firms' radical innovation. Therefore, in practice, firms should not only acquire new technical knowledge from the outside but also manage and exploit that knowledge constantly by converting it into the development of new products and services.

knowledge acquisition and radical innovation. Therefore, this work contributes to the knowledge acquisition and absorptive capacity literature from the perspective of knowledge characteristics. Third, we contributed to the recent work on inter-organizational knowledge acquisition in transition economies by extending the previous research via an empirical study of China. As the world's largest transition economy, China has experienced rapid economic growth over the past three decades (Du & Mickiewicz, 2016), and here, innovation has been a national strategy to drive economic development (Lin et al., 2016). However, compared with market economies, transition economies often present underdeveloped institutional frameworks and ineffective legal systems (Iriyama, Kishore, & Talukdar, 2016), which force firms to face more complicated environments. In this vein, our findings suggest that inter-organizational knowledge acquisition represents an effective supplementary strategy for firms to promote innovation in transition economies. Thus, our results provide significant new implications for firms' radical innovation in transition economies by revealing how the transfer of inter-organizational knowledge acquisition to firm innovation can be accomplished by improving the level of realized absorptive capacity.

5.3. Limitations and future research There were certain limitations in this study, which could be explored in future research. First, as our findings were derived from survey data collected in the high-tech industry in the transitioning market of China, our results may be both industry- and country-specific. Therefore, caution should be exercised when generalizing our findings to other industries or to other transition economies. Nonetheless, the expansion of our research to traditional industries (i.e., non-high-tech industries) and to other transition economies would be a fruitful line of inquiry. Secondly, although we examined the mediating role of realized absorptive capacity in the relationship between inter-organizational knowledge acquisition and firms' radical innovation, there may have been other factors at play as well, such as internal R&D (Denicolai et al., 2016) or institutional distance (Ho et al., 2017), which could have also influenced this relationship. Future research could address some of these other factors to explore this topic further. Overall, our results lead us to believe that this study provides considerable insights into the subject by theoretically and empirically examining the underlying relationships between inter-organizational knowledge acquisition and firms' radical innovation. We hope that our investigation will inspire future research on how inter-organizational knowledge acquisition strategies and realized absorptive capacity shape firm innovation.

5.2. Managerial implications As inter-organizational knowledge acquisition becomes increasingly important for firms in the current competitive environment, our work offers managers several meaningful ideas about how to manage external knowledge for radical innovation. From a managerial standpoint, our findings show that inter-organizational knowledge acquisition is a valid approach for improving firms' radical innovation. Thus, managers should place greater emphasis on inter-organizational knowledge acquisition by actively establishing formal and informal collaborations with partners. Inter-organizational knowledge acquisition can occur in a variety of ways (Almeida et al., 2003). For example, as experience, skills, and technical know-how are typically considered aspects of tacit knowledge that is acquired through extensive practice and over time, it would be wise for firms to establish informal collaborations, such as meetings and consultations with the technical staff of their partners. Moreover, our results suggest that acquiring external knowledge alone is insufficient for firms to promote radical innovation; the key mechanism is to develop firms' realized absorptive capacity. Thus, Table A1 Characteristics of the sample. Classification

Item

Number

Percentage (%)

Classification

Item

Number

Percentage (%)

Number of employees

< 20 20–300 300–1000 > 1000 <3 3–20 20–400 > 400 < 1% 1%–2% 2%–5% 5%–10% 10%–15% > 15% Total

41 169 96 70 84 146 77 69 19 71 107 64 52 63 376

10.90 44.95 25.53 18.62 22.34 38.83 20.48 18.35 5.05 18.88 28.46 17.02 13.83 16.76 100.00

R&D personnel intensitya

< 2% 2%–5% 5%–10% 10%–15% > 15% <3 3–5 6–10 11–15 > 15 SOEs CREs PEs FIEs Total

48 150 110 35 33 33 97 106 57 83 108 39 156 73 376

12.77 39.89 29.26 9.31 8.78 8.78 25.80 28.19 15.16 22.07 28.72 10.37 41.49 19.42 100.00

Annual turnover (million)

R&D expenditure intensityb

Firm age (years)

Ownership

Note: a = number of R&D employees/total number of employees; b = annual R&D expenditure/total sales.

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Xuemei Xie is a professor of Innovation Management at School of Management, Shanghai University, China. She has been the visiting scholar at University of California, San Diego. Her main research interests include collaborative innovation and knowledge management. She has managed more than ten research projects funded by National Natural Science Foundation of China, ministries and government agencies. She has more than thirty publications in international journals such as Journal of Business Research, Journal of Business Ethic, Technovation, Psychology & Marketing, IEEE Transactions on Engineering Management, Business and Society, Asia Pacific Journal of Management, Business Strategy and the Environment, Technology Analysis & Strategic Management, and Total Quality Management & Business Excellence, among others. Lijun Wang is a Research Assistant of Innovation Management at School of Management, Shanghai University, China. Saixing Zeng is Head, and professor of Technology Management and Green Innovation at Antai School of Management, Shanghai Jiao Tong University, China. His main research interests include technology management, green innovation, and CSR. He has managed a large number of research projects funded by National Natural Science Foundation of China, ministries and government agencies. He has a large number of publications in international journals such as Journal of Business Ethics, Journal of Business Research, Technovation, Asia Pacific Journal of Management, Technology Analysis & Strategic Management, Corporate Social Responsibility & Environmental Management, Technological and Economic Development of Economy, Management Decision, Journal of Cleaner Production, and Total Quality Management & Business Excellence. He is in the Editorial board of Asia Pacific Journal of Management, and Architectural Science Review.

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