Scholars and practitioners alike now recognize that a firm’s capacity to assimilate and use know-how from external sources — what Cohen and Levinthal (1990) called “absorptive capacity” — plays a central role in innovation performance. In recent years, a common strategy pursued by...

The field of strategy has mounted an enormous effort to understand, define, predict, and measure how organizational capabilities shape competitive advantage. While the notion that capabilities influence strategy dates back to the work of Andrews (1971), attempts to formalize a “capabilities...