Absorptive Capacity Measurement Model:A Study of Iranian Pharmaceutical Firms

Cohen and Levinthal (1990) defined absorptive capacity (AC) as ‘‘the ability of a firm to recognize the value of new external information, assimilate it, and apply it to commercial ends’’. They argued that AC is an organizational learning concept and is the cumulative effect of continuous learning. However, this definition deals primarily with external knowledge and information. Implicit in the definition is the notion that firms are aware of internal information and have access to it. In some cases, organizations may not be aware or have access to its existing knowledge, especially tacit knowledge that can only be communicated by direct social interaction. Thus, a network of formal and informal communication linkages are necessary for the internal diffusion of new knowledge and technology. This study develops valid and reliable instruments to measure the sub-dimensions of AC.