Knowledge Absorptive Capacity and Innovation through Salient Issues of Agricultural New Firms

Abstract

The purpose of this research is to study the potential and realized absorptive capacity for creating the innovation of new firms in the agricultural sector. At present, the policy of Thai government has driven all business sectors towards innovation, particularly the policy to promote innovation for the agricultural new firms.  This research uses survey data received from 188 new firms and in-depth interviews data from 4 new agricultural firms. Hierarchical regression is employed to test the hypotheses.  The findings show that potential absorptive capacity plays a critical role for enhancing innovation to agricultural new firms.  However, the new firms are still lack of the prior-related knowledge and experience for applying their existing knowledge with external knowledge to create new innovation. Hence, to enhance the innovation of agricultural new firms, the owners and the government should focus on building networks with external knowledge sources and on accumulating the firms’ prior-related knowledge to be sufficient for future innovation.