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Publications
Publications
  • 2011
  • Working Paper
  • HBS Working Paper Series

The Contingent Effect of Absorptive Capacity: An Open Innovation Analysis

By: Andrew A. King and Karim R. Lakhani
  • Format:Print
  • | Language:English
  • | Pages:35
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Abstract

Technological advancement and innovation requires the integration of both external knowledge and internal inventiveness. In this paper, we unpack the concept of absorptive capacity and separately explore the effect of different types of prior experience on the capacity to adopt external knowledge and make internal inventions. We also measure how absorptive capacity is influenced by changes in design "paths." We investigate nine open source programming contests in which 875 software programmers submit over 4.7 million lines of code. We conduct our analysis at the individual level and identify how programmers gain the ability to adopt and invent valuable code. Our evidence both confirms the theory of absorptive capacity and suggests refinements to it. We find that prior experience with both adoption and invention can indeed improve the capacity to adopt and invent valuable code, but we find that experience with adoption has the largest effect on invention capacity. We also find that major changes in the design "path" both advance and impede absorptive capacity. Changes in path allow rapid experience with alternative ideas, and this eventually aids adoption and invention capacity. However, these changes temporarily harm the ability of programmers to create valuable inventions. We discuss the implications of our findings for the literature on absorptive capacity and open and distributed innovation.

Keywords

Experience and Expertise; Collaborative Innovation and Invention; Technological Innovation; Knowledge Use and Leverage; Performance Capacity; Technology Adoption

Citation

King, Andrew A., and Karim R. Lakhani. "The Contingent Effect of Absorptive Capacity: An Open Innovation Analysis." Harvard Business School Working Paper, No. 11-102, April 2011.
  • SSRN
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About The Author

Karim R. Lakhani

Technology and Operations Management
→More Publications

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More from the Authors
  • Time Dependency, Data Flow, and Competitive Advantage By: Ehsan Valavi, Joel Hestness, Marco Iansiti, Newsha Ardalani, Feng Zhu and Karim R. Lakhani
  • VideaHealth: Building the AI Factory By: Karim R. Lakhani and Amy Klopfenstein
  • Threadless: The Renewal of an Online Community By: Shane Greenstein, Karim Lakhani and Christian Godwin
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