Knowledge sharing and innovation capability: Does absorptive capacity function as a mediator?

Knowledge is increasingly regarded as the critical resources of firms and has been advocated extensively in the management literature. Much recent attention has been focused on the importance of effective ldquoknowledge sharingrdquo and its relationship with firmspsila performance. A plethora of work has also found evidence to support the notion that absorptive capacity plays an important role in the firmpsilas ability to acquire knowledge and learn from various sources. This paper attempts to build an integrated framework, exploring the effects of knowledge sharing within firms on absorptive capacity and the relationship between these two constructs and innovation capability of firms. Based on the sample of 115 Chinese firms, this paper employs the structural equation modeling technique to empirically investigate the influence of knowledge sharing behavior on absorptive capacity and innovation capability, and the mediating effects of absorptive capacity. The managerial implications are inferred from the empirical results.