The Mediating Role of Knowledge Acquisition on the Relationship Between External Social Capital and Innovativeness

• Author: Pedro Manuel García‐Villaverde,Gloria Parra‐Requena,Job Rodrigo‐Alarcón,María José Ruiz‐Ortega
• DOI: http://doi.org/10.1111/emre.12049
• Published date: 01 September 2015
• Date: 01 September 2015

The Mediating Role of Knowledge

Acquisition on the Relationship Between

External Social Capital and Innovativeness

Gloria Parra-Requena1,María José Ruiz-Ortega1,

Pedro Manuel García-Villaverde1, and Job Rodrigo-Alarcón2

1Business Department, University of Castilla-La Mancha, Albacete, Spain

2Business Department, University of Castilla-La Mancha, Cuenca, Spain

In this paper we analyse how external social capital affects innovativeness through knowledge acquisition.

Specifically, we test the effect of density, trust and cognitive proximity on the innovativeness of firms and the

mediating role of external knowledge acquisition to explain these relationships. We focus our empirical study upon

the footwear industry in Spain, using partial least squares to test the proposed hypotheses. The main contribution

of this study is to demonstrate how knowledge acquisition leads the firm’s external social capital to innovativeness.

Keywords: innovativeness; external social capital; density; trust; cognitive proximity; knowledge acquisition;

mediation effects

Introduction

The relevance given in the literature to innovativeness is

accentuated in a context of globalization, increasing

competition, strong market and technological uncer-

tainty and international crisis such as is currently the

case, because of its importance for growth, profitability

and survival of firms (Kyrgidou and Spyropoulou,

2013). We understand innovativeness as a willingness to

innovate that ‘reflects a firm’s tendency to engage in and

support new ideas, novelty, experimentation, and crea-

tive processes that may result in new products, services,

or technological processes’ (Lumpkin and Dess, 1996:

142). Despite the extensive research focused on the

effect of innovativeness on performance (Rauch et al.,

2009), only a few studies have analyzed the antecedents

of a firm’s innovativeness (Kyrgidou and Spyropoulou,

2013; among others). We therefore consider that it is

necessary to address and examine background factors

for understanding innovativeness.

In recent years, a lively discussion has arisen on the

role that external social capital (ESC) plays as a key

antecedent in a firm’s innovativeness (Huggins and

Johnston, 2010; among others). We understand that it is

important to study in depth the effect of density,trust and

cognitive proximity on social networks, because they

have major implications for innovativepropensity (Stam

and Elfring, 2008) and are the most controversial

components of ESC in relation to innovativeness

(Molina-Morales and Martínez-Fernandez, 2009).

Density, trust and cognitive proximity can generate both

advantages and risks for innovativeness (Koka and

Prescott, 2002; Inkpen and Tsang, 2005; Nooteboom

et al., 2007; Expósito-Langa and Molina-Morales, 2010;

Molina-Morales, Martínez-Fernández and Torló, 2011).

Previous studies have highlighted the benefits of collabo-

rative climate, loweragency and transaction costs, access

to valuable resources, restraint upon opportunistic behav-

ior and improvement in a firm’s ability to adapt to com-

plexity and change, among others. However, they have

also observed problems linked to cost and time spent on

maintaining relationships, redundancy, blindness, inertia

and myopia. The literature shows contradictory effects of

components of ESC on a firm’s innovativeness,which the

current debate has not yet resolved. Thus, if we analyse

the density, we can find a positive effect (Rost, 2011), a

negative effect (Levin and Cross, 2004) or a non-

significant effect (Zhang and Wu, 2013). Similarly, if we

analyse trust, we can find a positive effect (Kaasa, 2009),

a negative effect (Li et al., 2013), a curvilinear effect

(Molina-Morales et al., 2011) or a non-significant effect

(Zhang and Wu, 2013). Furthermore, if we analyse

Correspondence: Job Rodrigo-Alarcón, University of Castilla-La

Mancha, Faculty of Social Sciences, 44, Los Alfares Avenue, 16071,

Cuenca, Spain. E-mail: Job.Rodrigo@uclm.es

European Management Review, Vol. 12, 149–169 (2015)

DOI: 10.1111/emre.12049

© 2015 European Academy of Management

cognitive proximity, we also can find a positive effect

(Dakhli and De Clercq, 2004), or a curvilinear effect

(Nooteboom et al., 2007). The effects of density,trust and

cognitive proximity are different, and even within the

same study they have been shown to have contradictory

effects. These ambiguous and divergent results reveal a

gap in the literature, which highlights the need for an

in-depth analysis of other factors that influence the

relationship between the controversial components of

ESC – density, trust and cognitive proximity – and

innovativeness (Obstfeld, 2005; Molina-Morales and

Martínez-Fernández, 2009).

We propose that knowledge acquisition plays a key

role in addressing this research gap. Several studies have

recently highlighted future research areas for the study

of the role that knowledge acquisition can have in the

development and performance of interorganizational

networks (Molina-Morales et al., 2011), as opposed to

those studies that focus on the interpersonal or

intraorganizational level (e.g., Tsai, 2001). We consider

knowledge acquisition to be an external integration

mechanism that facilitates the absorption of critical

knowledge from external sources (Zhou and Li, 2012).

External knowledge acquisition has been related to

innovativeness, because it is a key determinant of the

willingness of firms to support the creativity, experimen-

tation and the development of new ideas (Yli-Renko

et al., 2001). It may also help to explain the link between

ESC and innovativeness. Recent studies, such as those

of Molina-Morales and Martínez-Fernández (2009),

suggest that the possibility of accessing relevant knowl-

edge could justify innovation in dense networks with

trust relationships, especially in geographically concen-

trated industries. However, research addressing this

perspective is currently lacking. The availability of

ESC is not a sufficient condition to drive a firm’s

innovativeness, as shown by the ambiguity in net direct

effects. On our view, density, trust and cognitive prox-

imity establish a potential context for innovativeness,

but do not, by themselves alone, promote a firm’s

innovativeness. We propose that external knowledge

acquisition is the necessary mechanism through which

firms demonstrate that they are capable of taking advan-

tage of density, trust and cognitive proximity to acquire

an innovative propensity, avoiding any problems that

might arise in the process.

The specific aim of this paper is to study the

mediating role of knowledge acquisition in order to

explain the relationship between external social capital –

density, trust and cognitive proximity – and a firm’s

innovativeness. The main contribution of this study is to

demonstrate how external knowledge acquisition drives

a firm’s ESC to innovativeness and heightens the

varying effects of density, trust and cognitive proximity.

We introduce a new focus to reinforce the relevance of

social capital perspective (Nahapiet and Ghoshal, 1998)

to explain innovativeness. On our view, the concept of

knowledge acquisition represents an interceding

factor, which is able to bridge the gaps in density-

innovativeness, trust-innovativeness and cognitive

proximity-innovativeness relationships. This study,

therefore, provides us with a fuller understanding of the

controversial factors determining innovativeness. In

addition, the industry chosen is well developed and tra-

ditional, most firms being located in districts or clusters.

Our study, therefore, contributes to highlighting the

special role of valuable knowledge acquisition in a

context of physical proximity and sense of belonging

where density, trust and cognitive proximity relation-

ships can facilitate, but also hinder, innovativeness.

Moreover, footwear industry firms display a tendency

towards the incremental type innovation linked to

exploitation strategies, in which the density of the

network has a relevant role (Belso-Martínez, 2010).

This paper is structured as follows. First, we explain

the theory and derived hypotheses. Then, we describe

the methodology used, followed by the results obtained.

Finally, we present the discussion, conclusions and

implications for theory and practice.

Theory

Innovativeness

According to Anderson et al. (2014) innovativeness

represents the firm-level propensity to pursue new

processes, business models or products. Therefore,

innovativeness shows the willingness to engage in crea-

tivity and experimentation through the introduction of

new products, services or processes (Lumpkin and Dess,

1996).

Research in the field of innovativeness has focused

mainly on the study of their effect on a firm’s perfor-

mance (Rauch et al., 2009 for a review of theoretical

perspectives and results of empirical studies on this

topic). Additionally, most researchers note that the

understanding of a firm’s innovative propensity remains

relatively undeveloped and inconclusive. One of the

main causes why these inconsistent results are produced

can be found in the different definitions of

innovativeness in various frameworks, different scales

being used to measure the same concept. Innovativeness

on our view is a different concept from both product and

process innovation. An innovation can be a new product

or service, a new process or a new administrative

system. However, innovativeness is not a specific inno-

vation, but a way of going about decision making and

taking actions. Innovativeness is ‘a willingness to

support creativity and experimentation in introducing

new products/services, and novelty, technological lead-

ership and R&D in developing new processes’(Lumpkin

150 G. Parra-Requena et al.

© 2015 European Academy of Management