Co-Innovation And Innovation Performance In Small Firms: The Mediating Role Of Absorptive Capacity

Abstract

This study analyzes the conceptual model to comprehend the relationship between co-innovation and 
innovation performance, directly or through the mediation of absorptive capacity in small firms. Take 
ninety-six small organizations employed in the handicraft, textile, food plus beverage, and numerous 
industries as study objects; this research tested and authenticated the conceptual design empirically 
using a partial least square based structural equation model analysis. The results show that co-innovation 
has a significant positive effect on innovation performance. In addition, absorptive capacity has a 
positive effect on innovation performance. In addition, this study shows that absorptive capacity plays a 
mediating role in the relationship between co-innovation and innovation performance. The effects of this 
study emphasize the importance of creating co-innovation with different partners, such as suppliers, 
competitors, consumers, and business industries, that can enable access to the broader range regarding 
resources to enhance innovation performance for small firms ultimately.