International high-tech SMEs innovative foreign knowledge inflows : effects of host country weak network ties and absorptive capacity

Purpose: The main purpose of this study is to explain the combined effects of host country weak network ties and absorptive capacity on the innovative foreign knowledge inflows of international high-tech small- and medium-sized enterprises (SMEs). Design/methodology/approach: Data are drawn from the two largest and most authoritative German Federal Government census-databases of biotech and nanotech SMEs. A structured survey questionnaire was administered and regression analysis adopted. Findings: This study demonstrates weak network ties in the host country and developing absorptive capacity produce a combined effect that positively influences international high-tech SMEs innovative foreign knowledge inflows. Also, host country weak network ties and absorptive capacity when considered separately, each respectively, positively influence innovative foreign knowledge inflows. Practical implications: The results help inform key personnel in international high-tech SMEs about the relevance of host country weak network ties and absorptive capacity for foreign knowledge inflows. In addition, the results help policymakers and think-tanks to promote tailored advice and guidance e.g. those policymakers implementing the EU Entrepreneurship 2020 Action Plan. Originality/value: There is a recent call in the literature to combine network theory and absorptive capacity theory to better explain knowledge creation in the context of international high-tech SMEs knowledge sourcing. By addressing this call, the study provides a more refined and comprehensive account of international high-tech SMEs innovative foreign knowledge inflows.