Managerial Ties, Knowledge Acquisition, Realized Absorptive Capacity and New Product Market Performance of Emerging Multinational Companies: A Case of China

Many firms rely on external sources to acquire knowledge that is critical for enhancing new product market performance. Using a sample of 121 emerging multinational corporations (EMNCs) from China, we explore the effects of managerial ties with government officials and foreign MNC partners on knowledge acquisition and investigate how the acquired knowledge affects firms’ new product market performance. Our results indicate that knowledge acquisition could only enhance new product market performance with the presence of realized absorptive capacity. Our study suggests that managers’ decisions on knowledge acquisition from external sources may not increase firms’ new product market performance. Instead, managerial prowess in integrating and transforming knowledge becomes paramount in enhancing new product market performance.