Knowledge Sharing Capability, Absorptive Capacity, and Innovation: An Empirical Study of Indonesia’s Information and Communication Technology Industries

This research investigates the relationships between knowledge sharing capability, absorptive capacity, and innovation. We propose statistical hypotheses and Structural Equation Modeling to study these relationships based on the data sampled from 104 companies of Indonesia’s information and communication technology industries, including, telecommunication service provider, support service provider, network vendors, and consumer devices vendors. By testing three hypotheses, this study finds that absorptive capacity is the intervening factor between knowledge sharing capability and innovation. It also shows that potential absorptive capacity has a positive effect on realized absorptive capacity, and realized absorptive capacity has positive influence on product and process innovation.