Technological entrepreneurship and absorptive capacity in Guangdong technology firms

Purpose – Technological entrepreneurship concerns the transformation of potentially viable technological opportunities into successful businesses. Absorptive capacity is argued to be essential for this transformation, since it can facilitate the prediction of new technology trends and the assimilation and application of new knowledge to produce new commercial outputs. The investigation of the relationships between absorptive capacity, technological entrepreneurship and their impact on Guangdong technology firms’ performance is the purpose of this study. Design/methodology/approach – In this aim a positive causal chain from absorptive capacity to technological entrepreneurship and from this latter to performance is tested through a mediation analysis, which uses an ordinary least squares regression-based path analytical framework for estimating indirect effects on a sample of 113 Guangdong technology-based firms. Findings – Findings are consistent with the hypothesis that greater absorptive capacity leads to greater technological entrepreneurship, which in turn leads to greater performance. Therefore evidence is provided about both the mediating role of technological entrepreneurship and the role of absorptive capacity as its antecedent in relation to Guangdong-based technology firms’ performance. Originality/value – A relevant but somewhat neglected relationship is examined using an integrative model in the Guangdong context. Moreover the study uses direct measures of absorptive capacity as a capability and provides a firm-level operationalization of technological entrepreneurship. In so doing it also adopts state-of-the-art analysis techniques and highlights the relevance of investments in soft factors for Guangdong technology firms’ path towards excellence.