International high-tech SMEs innovative foreign knowledge inflows: effects of host country weak network ties and absorptive capacity

Cao, Qi ORCID: https://orcid.org/0000-0001-5928-8422, Freund, David, Lee, Robert and Tuselmann, Heinz ORCID: https://orcid.org/0000-0001-6628-1675 (2020) International high-tech SMEs innovative foreign knowledge inflows: effects of host country weak network ties and absorptive capacity. Multinational Business Review, 28 (3). pp. 333-354. ISSN 1525-383X

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Abstract

Purpose The main purpose of this study is to explain the combined effects of host country weak network ties and absorptive capacity on the innovative foreign knowledge inflows of international high-tech small- and medium-sized enterprises (SMEs). Design/methodology/approach Data are drawn from the two largest and most authoritative German Federal Government census-databases of biotech and nanotech SMEs. A structured survey questionnaire was administered and regression analysis adopted. Findings This study demonstrates weak network ties in the host country and developing absorptive capacity produce a combined effect that positively influences international high-tech SMEs innovative foreign knowledge inflows. Also, host country weak network ties and absorptive capacity when considered separately, each respectively, positively influence innovative foreign knowledge inflows. Practical implications The results help inform key personnel in international high-tech SMEs about the relevance of host country weak network ties and absorptive capacity for foreign knowledge inflows. In addition, the results help policymakers and think-tanks to promote tailored advice and guidance e.g. those policymakers implementing the EU Entrepreneurship 2020 Action Plan. Originality/value There is a recent call in the literature to combine network theory and absorptive capacity theory to better explain knowledge creation in the context of international high-tech SMEs knowledge sourcing. By addressing this call, the study provides a more refined and comprehensive account of international high-tech SMEs innovative foreign knowledge inflows.