Absorptive Capacity and Its Dual Effect on Technological Innovation: A Structural Equations Model Approach

Knowledge absorptive capacity (ACAP) is a key dynamic capability that boosts business innovation, particularly in developing economies. However, scarce studies focus on ACAP and technological innovation (TI) the context of small- medium-sized enterprises (SMEs). Therefore, this study aims to examine effects two different types knowledge capacities generate TI Mexican manufacturing industry determine whether realized (RACAP) mediates relationship between potential (PACAP) TI. This analysis was carried out through an empirical predictive type quantitative approach. A survey-type questionnaire randomly applied sample 249 SMEs. The survey confers 200 managers’ opinions Mexico. outcomes obtained variance-based structural equations (PLS-SEM) approach revealed PACAP significantly influences RACAP, whereas, RACAP does impact has full mediating effect Nevertheless, although significant direct not verified, research demonstrated indirect findings reveal important implications for managers decision-makers who must their strategies ensure external acquired assimilated by employees so will result transformation exploitation internal (RACAP), converting it into new products processes.