UK Accounting Glossary
A limit to the rate or quantity of scientific or technological information that a firm can absorb. If such limits exist they provide one explanation for firms to develop internal R&D; capacities. R&D; departments can not only conduct development along lines they are already familiar with, but they have formal training and external professional connections that make it possible for them to evaluate and incorporate externally generated technical knowledge into the firm better than others in the firm can. In other words, a partial explanation for R&D; investments by firms is to work around the absorptive capacity constraint.
This term comes from Cohen and Levinthal (1990).
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Absorptive Capacity are sourced/syndicated and enhanced from:
This glossary post was last updated: 20th March 2020.