Examining relationships between external linkages, absorptive capacity and gains in new product knowledge and impacts on new product innovativeness

This thesis investigates relationships between external linkages and new product innovativenessf ocusing particularly on the perspectiveo f a knowledge-enabledv iew of new product development. Building on organisational learning theory and knowledge-basedth eorieso f inter-firm collaboration,t his thesis arguest hat the effects of external linkages on new product innovativeness vary and these are largely contingent upon a finn's absorptive capacity. The finn's level of absorptive capacity determines how effectively knowledge from external collaborators relevant to the new product project is absorbed, resulting in the creation of new knowledge that the finn can apply for its own commercial use. It considers why some firms are more effective than others at absorbing new product related knowledge from external collaborators to facilitate more innovative product development. Based on an empirical study of 116 new product development projects in Taiwanese Information Technology (IT) firms, the thesis assesses the relative importance of external linkages in increasing new product innovativeness. The results showt hat the impacto f horizontall inks (that is, collaborationw ith otherc ompanies, research institutes, and universities) on gains in new product related knowledge is greater than that of vertical linkages (that is, supplier and customer involvement). Compared to links with customers, universities, and research institutes, corporate linkages play the most prominent and consistent role in enhancing the accumulation of new product related knowledge. This knowledge namely pertains to predevelopmenat ssessmentR, &D, manufacturinga nd marketing. The thesis confirms that the firm's absorptive capacity positively affects its gains in new product related knowledge. In addition, absorptive capacity's interactions with corporate linkages have significant, positive effects on gains in new product related knowledge. However such interaction effects were not observed for the other external linkages, with exception of industry-based research institute linkage. Moreover, the results confinn that the positive impacts of absorptive capacity, corporation linkages, and supplier linkages on new product innovativeness are mediated by the extent of new product related knowledge gained. This thesis bridges the gap between theories of organisational absorptive capacity and the effective generation of new products. It contributes to our understanding of the role of a firm's absorptive capacity in NPD research. It examines this issue from a knowledge-enabled view of new product development. The findings will assist managers to more effectively formulate NPD strategy by incorporating firms' internal learning capacity with the complementary knowledge and technology that external collaborators can provide.