Temporary employment: Curse or blessing for a firm's absorptive capacity?

Despite the importance of absorptive capacity (AC) for firms’ competitiveness, its antecedents are not yet fully understood. AC is a multidimensional construct, consisting firm's capability to acquire and assimilate new external knowledge (potential AC), followed by transform exploit it (realized AC). Building on insight that different dimensions vary in their nature needs we predict working with temporary employees will have an opposite effect potential realized AC. We test this proposition using firm-level data from World Bank's Enterprise Innovation Capability Survey 2,228 firms nine developing countries. indeed find acquisition benefit exploitation suffer reliance employees. Our results thus identify partial contradiction between drivers integration mechanisms may potentially solve contradiction. As all required absorbing knowledge, research highlights overlooked challenge.