The purpose of this study is to theoretically and empirically advance a concept of competitive antecedents to absorptive capacity (AC) research and to explain their relationship to a firm’s innovative performance. A firm’s competitive antecedents involve a relative advantage in a firm’s ability to access external knowledge – (i.e. relative advantage in external knowledge flows) – and a relative advantage in appropriating these external knowledge flows (i.e. relative advantage in appropriability regime).
By drawing on network and market share explanations, hypotheses were developed in which a firm’s AC is argued to mediate the influence of these competitive antecedents on a firm’s innovations. In using linear and negative binomial estimation methods, a mediation analysis of the US biotechnology industry was conducted.
A firm’s competitive antecedents have a positive influence on a firm’s AC and that these influences indirectly impact a biotechnology firm’s product innovations.
While a firm’s innovation is widely attributed to its AC, this study’s concept of competitive antecedents shows that a firm’s competitive advantage lies upstream from its AC.
