Knowledge management in offshoring innovation by SMEs: role of internal knowledge creation capability, absorptive capacity and formal knowledge-sharing routines

Purpose In spite of the increased attention on knowledge management processes as important variables for firms to generate performance benefits within supply chain literature, little is known about how these could impact offshoring innovation (OI) relationships held by small and medium-sized enterprises (SMEs). Considering their growing importance, this study aims investigate interplay between internal creation capability, absorptive capacity formal routines in attaining OI SMEs. Design/methodology/approach Grounded knowledge-based view theory, forwards various hypotheses interests. The authors test using survey data collected from 200 European SMEs that engage offshore supplier relationships. Findings findings suggest capability positively associated capacity. Not only outcomes but it also mediates effect performance. Additionally, knowledge-sharing negatively moderate relationship Originality/value This contributes well literature empirically showing through enhanced goes beyond merely accessing assimilating supplier’s achieve gains. results succeed gaining subsequent OI, essential create retain internally.