The orientation of knowledge sources and knowledge transfer towards innovation capabilities are moderated by absorptive capacity: an empirical study in perspective of manufacturing industries

This paper intends to explore the impact of knowledge sources on innovation capabilities of the firm. Firms tend to improve their innovation capabilities for the long-term survival. In the process of innovation, firms increasingly rely on the several knowledge sources. The objective is to find the effects of knowledge sources on firm's innovation capabilities. On the bases of self-administered survey, data was collected to achieve the convenience sample of 181 respondents. Different manufacturing industries in Faisalabad division were targeted for this purpose. Different manufacturing industries' owners, managers, directors or supervisors were consulted and collected the valid responses of 181 sample size. Data analysis was completed by using the SPSS, AMOS and Process macro. The results of this study signpost that the knowledge sources positively influence the innovation capabilities of the firm. Particularly, the knowledge sources' direct effect is fully mediated by knowledge transfer. Furthermore, the knowledge sources' effects are contingent upon the absorptive capacity. The contribution of this study is not only to investigate the effect of knowledge sources on firm's innovation capabilities in the literature of knowledge sources but also it contributes to the knowledge management research by illustrating the moderating effect of absorptive capacity.