Responsible Innovation in Emerging Markets’ SMEs: The Role of Alliance Learning and Absorptive Capacity

This paper presents an examination of the role played by alliance learning in enabling emerging market small and medium-sized enterprises (SMEs) to develop responsible innovation. SMEs based in emerging markets face significant challenges due to their weak resource base and the limited support they receive from formal institutions. In such a context, we argued that alliance learning takes a more prominent role in enabling these firms to develop responsible innovation via their absorptive capacity and sense-making competency. Drawn from 176 survey responses from SMEs originating from Pakistan, our findings shed light on the vital role played by alliance learning in enhancing SMEs’ responsible innovation. Specifically, the findings indicate that absorptive capacity acts as an important mechanism between alliance learning and responsible innovation. In addition, sense-making competency emerges as an important boundary condition and as a vital dynamic capability under which the effects of alliance learning on responsible innovation are stronger through the mediating mechanisms of absorptive capacity. These moderating-mediating findings contribute to the literature on dynamic capabilities and responsible innovation and provide important insights into the mechanisms and boundary conditions of responsible innovation in the context of emerging Asian markets.