International R&D and Manufacturing Networks: Dynamism, Structure and Absorptive Capacity

We analyze the absorptive capacity (AC) process of a manufacturing company with central R&D and an internationally distributed manufacturing network. Prior research shows that an implementation of the lead factory (LF) is especially supportive if the international manufacturing network struggles with implementing new products and processes. We analyze determinants of AC and show that, in addition to prior related knowledge of the receiving plant, structure can have an even stronger influence. We show that in the case of a low level of prior related knowledge and a low level of AC within the receiving plants as well as high technological heterogeneity between plants and LF, the implementation of an LF may not lead to the expected result. In addition, we conclude that the analysis of the AC process has to move from a single unit to a network. This helps to understand the AC concept in the context of multinational companies.