Contextual Differentiation of Absorptive Capacity: Empirical and Conceptual Development

This paper is focused on the research and operationalization of the absorption capacity in technology driven firms with a particular focus on their technology based innovation performances, which is widely recognised as a means of achieving and maintaining the firms' competitive advantage. Although research in the field of absorption capacity was globally initiated more than two and a half decades ago, the same was not at all the case with Eastern European firms. Considering that, the research objective of this paper arises: what is the level of the absorptive capacity in technology driven Croatian firms and how does it catalyse their innovation outputs? Our specific objectives are to measure the integrated level of the absorptive capacity (ACAP) with respect to all its constituent components; assimilation, acquisition, transformation and exploitation. Such an ACAP measured value will be tabulated against the innovation outputs of firms and their business performances. To achieve these objectives a selected population of more than 200 Croatian firms that are dealing technology development was defined as a sample and asked to fill the questionnaire. Forty five of them that have fully responded were tested against formulated hypothesis ultimately proving that the higher level of ACAP is somehow positively driving their innovation performances.