The Effects of Technological, Organizational, and People Characteristics on Absorptive Capacity and Innovation Performance in IT Industrial Clusters

In the modern IT industrial cluster environment, IT cluster companies increasingly depend on external sources of information to promote innovation and improve their performance. In doing so, IT cluster companies should first enhance their absorptive capacities to increase their abilities to evaluate, assimilate, and apply external knowledge to their industries. Absorptive capacity is what enables companies to effectively acquire and utilize external as well as internal knowledge, which affects the company's ability to innovate and adapt to its changing environment. However, no prior studies have explored the influences of external and internal factors on the absorptive capacities and innovation performance of IT clusters. Therefore, we have demonstrated the relationship between IT cluster characteristics and the innovation performance of firms located in those clusters through an empirical investigation of IT firms based in the Teheran, Guro, and Daedeok Valleys, which are South Korea’s three major IT clusters. This study developed a research model to explain the effects of IT industrial clusters and collected 114 survey responses from CEOs or managers in the three major IT clusters. The empirical results of this study showed that support technologies, management advocacy, and staff expertise had positive effects on absorptive capacity, and absorptive capacity had a positive effect on innovation performance. This study contributes to the understanding of the antecedents and outcomes of absorptive capacity by providing crosssectional data that presents important theoretical and practical implications.