The field of strategic management addresses challenges that firms encounter in an attempt to remain competitive. The ability to explain variation in firm success through examination of knowledge flows has become a prominent focus of research in the strategic management literature. Specifically, researchers have sought to further examine how firms convert knowledge, a phenomenon conceptualized as absorptive capacity. Absorptive capacity is the firm’s ability to acquire, assimilate, transform, and exploit knowledge. Few studies have captured the richness and multi-dimensionality of absorptive capacity, and it remains to be understood how the dimensions of the phenomenon convert knowledge. Furthermore, how absorptive capacity influences the firm remains to be understood. To address these research gaps, this dissertation seeks to (1) determine how absorptive capacity converts knowledge, and (2) determine how absorptive capacity influences firm capabilities. The research questions are investigated using structural modeling techniques to analyze data collected from software-industry firms. The findings offer contributions to the absorptive capacity and capability literatures. For example, absorptive capacity is hypothesized to consist of complex relationships among its internal dimensions. However, findings of this study suggest the relationships among the dimensions are linear in nature. This finding is in line with the theoretical foundations of and early literature on absorptive capacity but contrary to recent conceptualizations, which suggests relationships among the dimensions are more closely related to the theoretical origins of absorptive capacity. Additionally, to examine how absorptive capacity influences the firm, a capability-based perspective is used to hypothesize the influence of absorptive capacity on firm capabilities. Findings suggest absorptive capacity positively influences each dimension of firm capabilities (e.g., operational, customer, and innovation capabilities); thus, absorptive capacity influences the firm by altering firm capabilities. Given the richness of the findings, numerous fields are likely to benefit from this investigation. Through an examination of absorptive capacity and capabilities, this study contributes to the understanding of the absorptive capacity phenomenon and offers insight into how the phenomenon influences the firm. Furthermore, practical implications are offered for managers interested in enhancing firm competitiveness.

PhD thesis / High-tech firms are no longer able to rely exclusively on their internal knowledge and technologies to respond effectively to current market dynamics. Instead, they frequently collaborate with external entities to access new technologies and share the costs and risks of the innovation process. However, the effectiveness of such collaborations is questioned by many executives. Yet, as these Product Development Collaborations (PDCs) become crucial for a firm’s growth and success in current times, executives and academics alike are paying growing attention to them. In marketing, PDC is an active research topic since 1999. However, the body of marketing knowledge on the PDC is scattered across several studies over an extended period of more than two decades. In addition, the extant marketing studies report results that are inconsistent on some PDC issues and have overlooked others. In particular, marketing strategy considerations, in terms of firm’s strategic capabilities and objectives, have received somewhat of a short shrift in the literature. My dissertation contributes to our marketing literature with (a) a systematic review study that synthesizes the current state of marketing knowledge on the topic, identifies the research lacunas, and sets a future research agenda; and (b) two theory-driven empirical studies that provide new insights and novel implications to enrich our understanding of PDCs, their relation to the firm’s marketing strategy, and provide clear guidance to practitioners on how to benefit most from their supplier collaborations. v Grounding on several theories, creating and using a unique dataset, and utilizing multiple research and econometric techniques, my dissertation empirically addresses the following two general research questions: RQ1. Can their functional (marketing, technological, and operations) capabilities lead firms into competency traps and hurt their innovation performance? How? Do international PDCs outperform domestic PDCs in combating the competency trap effect? When? RQ2. What is the appropriate PDC governance mechanism (joint ventures, agreements, or licenses) that would enhance innovation performance? How do governance and capabilities simultaneously impact innovation performance? How does the firm’s product positioning strategy (differentiation versus cost-leadership) interact with governance and capabilities to affect innovation outcomes? / Dissertation / Doctor of Philosophy (PhD) / Many firms establish Product Development Collaborations (PDCs) with suppliers to innovate new products. Although PDCs have numerous advantages, they are ladened by various contractual hazards and risks. This raises concerns of many executives about their effectiveness. In this dissertation, I systematically review the existing marketing studies on the PDC topic. Then, building on my review, I empirically investigate several marketing strategy factors that impact a PDC's effectiveness in terms of enhancing the innovation performance of focal firms. Drawing on several theories, building and using a unique dataset, and utilizing multiple research and econometric techniques, I conduct two empirical studies to examine the impact of four strategic considerations (i.e., functional capabilities, international PDCs, PDC governance mechanisms, and positioning strategy) and their interactions on innovation performance of high-tech firms in PDCs. My results reveal various interesting and important relationships and interactions that advance our understating of PDCs, their relation to marketing strategy, and provide important managerial implications to practitioners.