Linking properties of knowledge with innovation performance: the moderate role of absorptive capacity

Purpose – The purpose of this paper is to unravel the complex linkages between properties of knowledge, firm's absorptive capacities, and innovation performance in China small and medium‐sized enterprises (SMEs). Design/methodology/approach – The authors utilize moderated multiple regression (MMR) to explore the complex relationships by using the empirical data of Chinese information technology and electro‐communication firms during 2005‐2008. Findings – The results show that only a few knowledge properties have negative effects on innovation performance. Most knowledge properties have a positive effect on innovation. The results also claim that the relationship between properties of knowledge and innovation performance is more pronounced when the firm has higher absorptive capacity. Originality/value – The study indicates that properties of knowledge and absorptive capacity are two inseparable determinants for innovation performance, and absorptive capacity moderates the relationship between properties of knowledge and innovation performance.