An Empirical Investigation into a Subsidiary Absorptive Capacity Process Model

literature. However, it remains to be surrounded by considerable ambiguity in terms of its actual meaning, the drivers influencing its evolution, and its impact on related outcomes. In this study, we take on some of the major criticisms and recent suggestions from the absorptive capacity literature and empirically test a process model of absorptive capacity. The setting of our empirical study is 213 subsidiaries of multinational enterprises and the focus is on the capacity of these subsidiaries to successfully absorb best practices in marketing strategy
from their headquarters. This setting allows us to explore the process model in its entirety, including different drivers of subsidiary absorptive capacity (organizational mechanisms and contextual drivers), the three original
dimensions of absorptive capacity (recognition, assimilation, application), and related outcomes (implementation and internalization of the best practice). The study’s findings reveal that managers have discretion in promoting
absorptive capacity through the application of specific organizational mechanism and that the impact of contextual drivers on subsidiary absorptive capacity is not direct, but mediated by these organizational mechanisms.