Knowledge sharing in international markets for product and process innovation: moderating role of firm's absorptive capacity

Purpose This study examines the relationship between knowledge-sharing activities of the firm and its innovation capability. It also investigates the moderating impact of the firms' absorptive capacity on the relationship between knowledge sharing and firm innovation capability from the cross-subsidiary perspective in the international market environment. Design/methodology/approach This study reviewed the literature from the areas of knowledge management, international market and innovation management. Through the literature review, absorptive capacity theory and dynamic capability view (DCV) theory, a conceptual model has been developed. This model has been validated using partial least squares structural equation modeling (PLS-SEM) technique with 612 respondents from 16 multinational firms from different countries. Findings The study finds that knowledge-sharing activities across subsidiaries of multinational firms are important for product and process innovation. Firms' absorptive capacity also impacts the relationship between firms' knowledge-sharing activities and their different dynamic capabilities, such as sensing, seizing and transforming. The study also finds that firms' innovation capability positively impacts their competitiveness. Research limitations/implications This study provides valuable inputs to the management of multinational firms to recognize the importance of knowledge-sharing activities across their different subsidiaries in the international marketing knowledge management (MKM) context. Originality/value The study adds to the literature on knowledge management, international market and firms' innovation capability. As the study examines the knowledge-sharing activities across different subsidiaries of multinational firms, especially in the context of process and product innovation, it is considered unique. The study also provides a unique validated model.