This study examines the relationship between knowledge management (KM) (in terms of external acquisition and internal sharing) and innovation behavior. The concept of absorptive capacity and assumptions from the dynamic capabilities view underlie the proposed framework and hypotheses. The framework is empirically tested using a random sample of 649 Dutch small to medium sized enterprises (SMEs). Our empricial results indicate that external acquisition practices play a key role in fostering SMEs’ innovativeness while internal sharing practices do not appear to have a significant influence. External acquisition activity enhances a firm’s awareness of available knowledge opportunities. Firms which actively acquire external knowledge (regardless of the type of knowledge) may build a greater competitive dynamic capability to sense and seize business opportunities which in turn may lead to new or improved products or processes. We suggest that owners/entrepreneurs of SMEs and their firms will benefit in the long term if they strategically manage knowledge, especially using external acquisition practices.

Additional Metadata
Keywords SMEs, absorptive capacity, innovation behavior, innovation orientation, knowledge management
JEL Search; Learning; Information and Knowledge (jel D83), Business Administration and Business Economics; Marketing; Accounting (jel M), New Firms; Startups (jel M13), Innovation and Invention: Processes and Incentives (jel O31), Management of Technological Innovation and R&D (jel O32)
Publisher Erasmus Research Institute of Management
Persistent URL
Series ERIM Report Series Research in Management
Journal ERIM report series research in management Erasmus Research Institute of Management
Zhou, H, & Uhlaner, L.M. (2009). Knowledge Management as a Strategic Tool to Foster Innovativeness of SMEs (No. ERS-2009-025-ORG). ERIM report series research in management Erasmus Research Institute of Management. Erasmus Research Institute of Management. Retrieved from