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
Publication Date:01 Sep 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

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