Using a sample of 893 SMEs over a ten year period, we test how firms may reduce the inefficiencies in their absorptive capacity (ACAP) due to path dependence. Our research shows that for frequent innovators, potential absorptive capacity (PACAP) has a greater effect than realized absorptive...

Firms often conduct external search for new opportunities, but not all search leads to growth. Integrating traditional explanations of search from behavioral theory with biological foraging models, we explain how absorptive capacity together with financial slack influence breadth or depth of...