How Institutional Factors Matter in Acquiring External Knowledge: A Case of Indonesian Firms in the Post Crisis Era

This research examines the antecedent of developing absorptive capacity in the context of emerging economy. In particular, it focuses on role of external knowledge, success experience of externally acquired knowledge, internal and external activation triggers. This research emphasizes on institutional factors that contribute on developing acquisition capability of the firms in emerging economy context. The results show the importance of how institutional factors such as government policy change and technological change influence the development of potential absorptive capacity especially acquisition capabilities. On the contrary, firms’ efforts in developing acquisition capabilities suffer while government regime changes.