Knowledge sharing within the firm, absorptive capacity and innovation capability: An empirical investigation on chinese firms

Based on the sample of 115 Chinese firms, this paper employs the structural equation modeling technique to empirically test the influence of knowledge sharing behavior on absorptive capacity, innovation capability, and the influence of absorptive capacity on innovation capability. The empirical results suggest that there exists a significant positive relationship between absorptive capacity and innovation capability. While the traditional system such as job rotation program and employee suggestion systems can contribute to firms' absorptive capacity, their influence on the firm's innovation capability is insignificant. On the other hand, knowledge sharing behaviors among, employees do not affect absorptive capacity significantly, but they do have a significant positive effect on innovation capability. The managerial implications are inferred from the empirical results.