The Influence of Absorptive Capacity on Innovation Capability: Case in Informal Small-Medium Enterprises Survey

Abstract

Abstract:  Related  with  the  emerging  concept  about  absorptive  capacity,  this  study  aims  to  explore  the relationship  between  dimensions  of  absorptive  capacity:  acquisition,  assimilation,  transformation  and exploitation to innovation performance by taking case in informal small-medium enterprises. This survey is very  crusial  to  be  done  concern  with  how  the  circumstance  of  informal  business  innovation  ability,  which part  of  absorptive  capacity  that  influence  the  most  and  which  part  which  is  the  less,  so  that  leverage innovation program for informal business can be done effectively.    Respondents of  this study were got from various type of 40 business owners. Data was analyzed using multiple regression analysis by t test and F test. The  result  shows  that  the  value  of  the  coefficient  of  determination  is  0.646,  means  that  the  variable acquisition,  assimilation,  transformation,  exploitation  accounted  for  64.6%  influence  to  the  variable innovation  capability  and  other  variables  remaining  constant  35.4%  influenced  by  other  variables  which  is not included in this study. It means simultaneously they influence significantly on innovation capability. 

Keywords: Absorptive Capacity, Innovation strategy, Informal sector business