Motivating absorptive capacity development: the roles of incentives, leadership, and teamwork

Abstract

This study explores the motivational antecedents of a firm’s absorptive capacity by examining the role of innovation incentives. Building on expectancy theory and equity theory, we argue that innovation incentives enhance absorptive capacity, and this effect is positively moderated by teamwork but negatively moderated by transformational leadership. To test our hypothesis, we employ a multi-respondent research design based on a sample of 102 Chinese automobile companies. The results show strong support for the hypotheses and demonstrate the positive direct impact of innovation incentives on a firm’s absorptive capacity, as well as the moderating effect of relational working context in shaping the influences of innovation incentives.