Knowledge Resources, ICT, and Their Links With SME Performance: The Role of Absorptive Capacity
In the industrial revolution 4.0, firms and SMEs are required to have dynamic capabilities to respond to environmental changes and increasing competitive pressures. Reconfiguring ICT and knowledge resources and capabilities is a must for firms in order to achieve performance and competitive advantages. This study aimed to bridge the research gap between knowledge resources and performance with absorptive capacity as an intervening variable. Moreover, this study also examined the effect of knowledge resources and ICT on absorptive capacity and performance. This study collected primary data from SMEs in Jepara, Rembang, and Semarang, Indonesia, through questionnaires, in-depth interviews, and focus group discussions. 285 SME owners participated. The data were analyzed employing SEM with multiple regression, which revealed that ICT significantly affected absorptive capacity and SME performance. Knowledge resources had a significant effect on absorptive capacity and SME performance. Furthermore, absorptive capacity had a significant effect on SMEs performance.
Keywords: knowledge resource, ICT, dynamic capability, performance, SMEs
 Teece DJ. Strategies for managing knowledge assets: The role of firm structure and industrial context. Long Range Planning. 2000;33(1):35-54. https://doi.org/10.1016/S0024-6301(99)00117-X
 M. Rafique, S. Hameed, and M.H. Agha, “Impact of knowledge sharing, learning adaptability and organizational commitment on absorptive capacity in pharmaceutical firms based in Pakistan.,” Journal of Knowledge Management. vol. 22, no. 1, pp. 44–56, 2018.
 M. Yunis, A.-N. El-Kassar, and A. Tarhini, “Impact of ICT-based innovations on organizational performance.,” Journal of Enterprise Information Management. vol. 30, no. 1, pp. 122–141, 2017.
 Koellinger P. The relationship between technology, innovation, and firm performance – Empirical evidence from e-business in Europe. Research Policy. 2008;37(8):1317- 28. https://doi.org/10.1016/j.respol.2008.04.024
 C.L. Witherspoon, J. Bergner, C. Cockrell, and D.N. Stone, “Antecedents of organizational knowledge sharing: a metaanalysis and critique.,” Journal of Knowledge Management. vol. 17, no. 2, pp. 250–277, 2013
 I. Nonaka, “A Dynamic Theory of Organizational Knowledge Creation.,” Organization Science. vol. 5, no. 1, pp. 14–37, 1994.
 Kogut B, Zander U. Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science. 1992;3(3):383-97. https://doi.org/10.1287/orsc.3.3.383
 Lane PJ, Lubatkin M. Relative absorptive capacity and interorganizational learning. Strategic Management Journal. 1998;19(5):461-77. https://doi.org/10.1002/(sici)1097- 0266(199805)19:5<461::aid-smj953>3.3.co;2-c
 Manaf HA, Armstrong SJ, Lawton A, Harvey WS. Managerial tacit knowledge, individual performance, and the moderating role of employee personality. International Journal of Public Administration. 2018;41(15):1258-70. https://doi.org/10.1080/01900692.2017.1386676
 Al Ahbabi SA, Singh SK, Balasubramanian S, Gaur SS. Employee perception of impact of knowledge management processes on public sector performance. Journal of Knowledge Management. 2018;2(23):351–373. https://doi.org/10.1108/JKM-08-2017- 0348
 Tsai PC, Shih CT. Responsible downsizing strategy as a panacea to firm performance: The role of dynamic capabilities. International Journal of Manpower. 2013;34(8):1015– 1028. https://doi.org/10.1108/IJM-07-2013-0170
 Gangi F, Mustilli M, Varrone N. The impact of corporate social responsibility (CSR) knowledge on corporate financial performance: Evidence from the European banking industry. Journal of Knowledge Management. 2018;23(1):110–134. https://doi.org/10.1108/JKM-04-2018-0267
 Zahra SA, George G. Absorptive capacity: A review, reconceptualization, and extension. Academy of Management Review. 2002;27(2):185-203. https://doi.org/10.2307/4134351  W.M. Cohen and D.A. Levinthal, “Absorptive Capacity: A New Perspective on Learning and Innovation.,” Administrative Science Quarterly. vol. 35, no. 1, pp. 128–152, 1990
 Mowery DC, Oxley JE, Silverman BS. Strategic alliances and interfirm knowledge transfer. Strategic Management Journal. 1996;17(S2):77-91. https://doi.org/10.1002/smj.4250171108
 C. Wang and Y. Han, “Linking properties of knowledge with innovation performance: the moderate role of absorptive capacity.,” Journal of Knowledge Management. vol. 15, no. 5, pp. 802–819, 2011
 Parida V, Oghazi P, Cedergren S. A study of how ICT capabilities can influence dynamic capabilities. Journal of Enterprise Information Management. 2016;29(2):179–201. https://doi.org/10.1108/JEIM-07-2012-0039  Tan KS, Chong SC, Lin B, Eze UC. Internetbased ICT adoption among SMEs: Demographic versus benefits, barriers, and adoption intention. Journal of Enterprise Information Management. 2010;23(1):27–55. https://doi.org/10.1108/1741039101100 8897
 Stoel MD, Muhanna WA. IT capabilities and firm performance: A contingency analysis of the role of industry and IT capability type. Information & Management. 2009;46(3):181-9. https://doi.org/10.1016/j.im.2008.10.002
 Nieto MJ, Fernández Z. The role of information technology in corporate strategy of small and medium enterprises. Journal of International Entrepreneurship. 2005;3(4):251-62. https://doi.org/10.1007/s10843-006-7854-z
 Mithas, Ramasubbu, and Sambamurthy, “How Information Management Capability Influences Firm Performance.,” MIS Quarterly. vol. 35, no. 1, pp. 237–256, 2011
 Yunis M, El-Kassar AN, Tarhini A. Impact of ICT-based innovations on organizational performance: The role of corporate entrepreneurship. Journal of Enterprise Information Management. 2017. https://doi.org/10.1108/jeim-01-2016-0040
 Sanders NR, Premus R. IT applications in supply chain organizations: A link between competitive priorities and organizational benefits. Journal of Business Logistics. 2002;23(1):65-83. https://doi.org/10.1002/j.2158-1592.2002.tb00016.x
 Victer R. The strategic implication of knowledge attributes: Understanding the conditions in which knowledge matters to performance. Management Decision. 2014;52(3):505–525. https://doi.org/10.1108/MD-04-2013-0235
 S.B. Leonardo, M.A.P. Silveira, P.M.T. Martinez-Sánchez, and M. do C. Romeiro, “Trust and knowledge contribution to agricultural cluster performance.,” International Journal of Productivity and Performance Management. vol. 70, no. 7, pp. 1489– 1509, 2021
 Tseng CY, Hung CH. Knowledge absorptive capacity and innovation performance in KIBS. Journal of Knowledge Management. 2011;15(6)971–983. https://doi.org/10.1108/136732711111 79316
 Neirotti P, Raguseo E, Paolucci E. How SMEs develop ICT-based capabilities in response to their environment: Past evidence and implications for the uptake of the new ICT paradigm. Journal of Enterprise Information Management. 2018;31(1):10–37. https://doi.org/10.1108/JEIM-09-2016-0158
 Zaheer A, Zaheer S. Catching the wave: Alertness, responsiveness, and market influence in global electronic networks. Management Science. 1997;43(11):1493-509. https://doi.org/10.1287/mnsc.43. 11.1493
 Flores E, Xu X, Lu Y. Human capital 4.0: A workforce competence typology for industry 4.0. Journal of Manufacturing Technology Management. 2020;31(4):687– 703. https://doi.org/10.1108/JMTM-08-2019-0309