Absorptive capacity and technology transfer effectiveness of Malaysian manufacturing firms

One of the factors that contribute to the effectiveness of technology transfer is absorptive capacity. However, only a little effort has been expanded to examine the firm‘s absorptive capacity regarding the technology transfer effectiveness, and still many studies are not comprehensive in explaining how absorptive capacity can effect the firm‘s results, especially in the effectiveness of technology transfer. Therefore, this study was conducted and the results were discussed to achieve several objectives, namely to identify the perception of the firm's manager regarding absorptive capacity in manufacturing companies in Northern Peninsular Malaysia, to determine the relationship between absorptive capacity and technology transfer effectiveness, and to determine the effect of absorptive capacity on technology transfer effectiveness. To illustrate the relationship between these variables, a research framework was constructed with reference to the theory of ―Knowledge-Based View‖. Data were collected through a survey of manufacturing firms in Northern Peninsular Malaysia with a response rate of 14.4%. The data were analyzed using descriptive and inferential statistics (Pearson correlation and regression analysis). The findings, based on factor analysis, found that absorptive capacity have been grouped into descriptive components where it was classified into seven groups, namely the capacity of recognition, acquisition, assimilation, transformation, exploitation, transformative and utilization. Furthermore, the findings from Pearson correlation, found that the technology transfer effectiveness is correlated by all of the absorptive capacity dimensions, while regression analysis showed that only three dimensions (transformation capacity, transformative capacity and utilization capacity) of the absorptive capacity have effects on technology transfer effectiveness. This study may contribute to the development of theories and knowledge on the technology transfer effectiveness and absorptive capacity, enhance the competitive position of the firms within the industry, and also help the government and the industry to formulate innovation policies and economic strategies from time to time.