Selective Absorption of Knowledge : How R&D Project Groups can Harness the Power of Absorptive Capacity

An empirical study of 208 R& D projects in the national laboratories of one country finds that the impact of knowledge stocks and knowledge flows on project performance is highly nuanced and differentiated. Knowledge within an R& D project group–the knowledge stock–tends to moderate knowledge that flows into the group. Whether the knowledge in the stock acts as a complement to or a substitute for knowledge inflow depends upon combinations of a variety of factors: the original source of the knowledge; the pathways and mechanisms through which knowledge flows into the project group; the nature of that knowledge; and whether the R& D project was primarily exploitative or exploratory. These findings imply that managers can selectively absorb knowledge by choosing types of internal knowledge, types of external knowledge and knowledge pathways, which–in conjunction–enhance the performance of a specific project. Conversely, they can deemphasize knowledge pathways or filter out types of knowledge that diminish performance or add little value. The paper contributes to the literature on the micro-foundations of absorptive capacity by providing a more granular view of absorptive capacity in project groups.