THE ABSORPTIVE CAPACITY OF THE INTERNATIONALISING FIRM: THE PERSPECTIVE OF CROSS-BORDER BUYER-SUPPLIER RELATIONSHIP

Abstract

This study is a literature review that attempts to address the theoretical and empirical deficiencies by proposing a theoretical framework constructed upon the concept of absorptive capacity associated with the development of cross-border buyer-supplier relationship during the process of internationalisation. Based on the relational view, absorptive capacity, and organisational learning, this paper is fundamental in furthering our academic understanding of the 1) acquisition of new knowledge from direct experience in internationalisation as well as indirect experience from foreign buyer and supplier; 2) assimilation of new knowledge; 3) exploitation of new knowledge by the internationalising firm.