ABSORPTIVE CAPACITY AS A CATALYST FOR INNOVATION AND BUSINESS PERFORMANCE: EMPIRICAL EVIDENCE FROM CATCHING-UP ECONOMIES
Ernest Vlačić
Abstract: This study aims to address the existing research gap by empirically examining the operationalization and impact of absorptive capacity within the Republic of Croatia, a catching-up economy. The primary objective is to investigate how absorptive capacity stimulates innovation activities and assess its influence on both firms' innovation performance outputs and overall business performance. To achieve this, the relationship between absorptive capacity, financial results, commercial success, and innovation frequency was systematically analyzed. The results of a statistical analysis conducted on data gathered from a survey of technology-driven firms reveal a strong positive correlation between higher levels of absorptive capacity and increased innovation activity, which in turn positively influences business performance metrics. These empirical insights contribute to the theoretical development of absorptive capacity literature while offering practical implications for improving firms' internal innovation management processes, particularly within the context of catching-up economies.
Keywords: Absorptive capacity, Innovation performance, Technology driven firms, Catching-up countries, New product and services
DOI: 10.24874/IJQR20.01-20
Recieved: 10.04.2025 Accepted: 23.09.2025 UDC:
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