Non-Absorptive Benefits of Absorptive Capacity

Alliances can contribute to the partners’ capability development either by allowing them to learn from each other, resulting in the partner capabilities becoming more similar, or by facilitating the development of specialized and complementary capabilities, resulting in the partner capabilities becoming more dissimilar but complementary. Current research suggests that both learning and complementary specialization are facilitated by absorptive capacity, but the possible differential effects of absorptive capacity on these two knowledge utilization patterns have not been examined. We argue that absorptive capacity can be decomposed into ‘technical’ and ‘procedural’ components, respectively representing the ‘know-what’ and ‘know-how’ aspects of prior knowledge. We then show that technical absorptive capacity enhances complementary specialization, while procedural absorptive capacity enhances learning. Our empirical analysis of 956 alliances provides support for our hypotheses.