Absorptive Capacity, Business Venturing and Performance: Corporate Governance Mediating Roles

This study offers insight through Structural Equation Modeling (SEM) into the joint impact of corporate absorptive capacity and corporate new business venturing on the performance of manufacturing firms in Nigeria as moderated by the quality governance mechanisms. Using the structured survey design,...

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Autores principales:	Cosmas Ikechukwu Asogwa, Osmund Chinweoda Ugwu, Anthonia Uju Uzuagu, Samson Ige Abolarinwa, Godwin Keres Okoro Okereke, Honesta Chidiebere Anorue, Favour Amarachi Moghalu
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2020
Materias:	absorptive capacity corporate entrepreneurship new business venturing assimilation acquisition corporate governance mediation innovation independent directors board size proactivity strategic renewal Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/fed1fda8b4844a32b57949472757d9b4
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spelling	oai:doaj.org-article:fed1fda8b4844a32b57949472757d9b42021-12-02T14:41:55ZAbsorptive Capacity, Business Venturing and Performance: Corporate Governance Mediating Roles2331-197510.1080/23311975.2020.1839157https://doaj.org/article/fed1fda8b4844a32b57949472757d9b42020-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2020.1839157https://doaj.org/toc/2331-1975This study offers insight through Structural Equation Modeling (SEM) into the joint impact of corporate absorptive capacity and corporate new business venturing on the performance of manufacturing firms in Nigeria as moderated by the quality governance mechanisms. Using the structured survey design, and respondents’ data from 330 employees of manufacturing firms, we provide evidence that both absorptive capacity and corporate new venturing entrepreneurship dimensions do not directly yield significant positive impact on firms’ performance. Rather, the significant effect depends on the quality of the corporate governance mechanisms. Firms’ absorptive capacity as measured by acquisition, assimilation (potential absorptive capacity), transformation, and knowledge exploitation (realized absorptive capacity) only resulted in value creation when mediated by key governance mechanisms including frequency of board meeting, and the presence of independent directors. Similar effect was detected on the effect of corporate new business entrepreneurship dimensions including innovation, proactivity, new business venturing and strategic renewal on firms’ performance in manufacturing sector. The path analysis showed that optimal board size, frequency of board meeting and the presence of independent directors jointly shape the way corporate new business entrepreneurship dimensions affect firms’ performance. By implication, weak governance occasioned agency problems that reduce the potential of corporate entrepreneurship to influence corporate financial performance positively. Overall, firms that wish to reap the benefit of knowledge management and new business venturing should develop their governance structures. Thus, board size and independent directors are expected to be optimal to enhance and achieve sufficient monitoring while frequency of board meeting should be given a priority to encourage knowledge sharing that will translate into higher financial performance.Cosmas Ikechukwu AsogwaOsmund Chinweoda UgwuAnthonia Uju UzuaguSamson Ige AbolarinwaGodwin Keres Okoro OkerekeHonesta Chidiebere AnorueFavour Amarachi MoghaluTaylor & Francis Grouparticleabsorptive capacitycorporate entrepreneurshipnew business venturingassimilationacquisitioncorporate governancemediationinnovationindependent directorsboard sizeproactivitystrategic renewalBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 7, Iss 1 (2020)
institution	DOAJ
collection	DOAJ
language	EN
topic	absorptive capacity corporate entrepreneurship new business venturing assimilation acquisition corporate governance mediation innovation independent directors board size proactivity strategic renewal Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	absorptive capacity corporate entrepreneurship new business venturing assimilation acquisition corporate governance mediation innovation independent directors board size proactivity strategic renewal Business HF5001-6182 Management. Industrial management HD28-70 Cosmas Ikechukwu Asogwa Osmund Chinweoda Ugwu Anthonia Uju Uzuagu Samson Ige Abolarinwa Godwin Keres Okoro Okereke Honesta Chidiebere Anorue Favour Amarachi Moghalu Absorptive Capacity, Business Venturing and Performance: Corporate Governance Mediating Roles
description	This study offers insight through Structural Equation Modeling (SEM) into the joint impact of corporate absorptive capacity and corporate new business venturing on the performance of manufacturing firms in Nigeria as moderated by the quality governance mechanisms. Using the structured survey design, and respondents’ data from 330 employees of manufacturing firms, we provide evidence that both absorptive capacity and corporate new venturing entrepreneurship dimensions do not directly yield significant positive impact on firms’ performance. Rather, the significant effect depends on the quality of the corporate governance mechanisms. Firms’ absorptive capacity as measured by acquisition, assimilation (potential absorptive capacity), transformation, and knowledge exploitation (realized absorptive capacity) only resulted in value creation when mediated by key governance mechanisms including frequency of board meeting, and the presence of independent directors. Similar effect was detected on the effect of corporate new business entrepreneurship dimensions including innovation, proactivity, new business venturing and strategic renewal on firms’ performance in manufacturing sector. The path analysis showed that optimal board size, frequency of board meeting and the presence of independent directors jointly shape the way corporate new business entrepreneurship dimensions affect firms’ performance. By implication, weak governance occasioned agency problems that reduce the potential of corporate entrepreneurship to influence corporate financial performance positively. Overall, firms that wish to reap the benefit of knowledge management and new business venturing should develop their governance structures. Thus, board size and independent directors are expected to be optimal to enhance and achieve sufficient monitoring while frequency of board meeting should be given a priority to encourage knowledge sharing that will translate into higher financial performance.
format	article
author	Cosmas Ikechukwu Asogwa Osmund Chinweoda Ugwu Anthonia Uju Uzuagu Samson Ige Abolarinwa Godwin Keres Okoro Okereke Honesta Chidiebere Anorue Favour Amarachi Moghalu
author_facet	Cosmas Ikechukwu Asogwa Osmund Chinweoda Ugwu Anthonia Uju Uzuagu Samson Ige Abolarinwa Godwin Keres Okoro Okereke Honesta Chidiebere Anorue Favour Amarachi Moghalu
author_sort	Cosmas Ikechukwu Asogwa
title	Absorptive Capacity, Business Venturing and Performance: Corporate Governance Mediating Roles
title_short	Absorptive Capacity, Business Venturing and Performance: Corporate Governance Mediating Roles
title_full	Absorptive Capacity, Business Venturing and Performance: Corporate Governance Mediating Roles
title_fullStr	Absorptive Capacity, Business Venturing and Performance: Corporate Governance Mediating Roles
title_full_unstemmed	Absorptive Capacity, Business Venturing and Performance: Corporate Governance Mediating Roles
title_sort	absorptive capacity, business venturing and performance: corporate governance mediating roles
publisher	Taylor & Francis Group
publishDate	2020
url	https://doaj.org/article/fed1fda8b4844a32b57949472757d9b4
work_keys_str_mv	AT cosmasikechukwuasogwa absorptivecapacitybusinessventuringandperformancecorporategovernancemediatingroles AT osmundchinweodaugwu absorptivecapacitybusinessventuringandperformancecorporategovernancemediatingroles AT anthoniaujuuzuagu absorptivecapacitybusinessventuringandperformancecorporategovernancemediatingroles AT samsonigeabolarinwa absorptivecapacitybusinessventuringandperformancecorporategovernancemediatingroles AT godwinkeresokorookereke absorptivecapacitybusinessventuringandperformancecorporategovernancemediatingroles AT honestachidiebereanorue absorptivecapacitybusinessventuringandperformancecorporategovernancemediatingroles AT favouramarachimoghalu absorptivecapacitybusinessventuringandperformancecorporategovernancemediatingroles
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Absorptive Capacity, Business Venturing and Performance: Corporate Governance Mediating Roles

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