The Role of Absorptive Capacity in Effectiveness of International Technology Transfer: Investigation of part suppliers in EF7 Project

Today, the completive advantage of companies depends on their organizational knowledge and their capabilities to absorb external technologies rather than their physical assets. There are a lot of studies on the absorptive capacity dimensions and the method of measurement in the literature, however the impact of absorptive capacity on the effectiveness of international technology transfer processes has rarely been touched upon. This paper investigates how absorptive capacity can influence the success of international technology transfer process. Therefore, this study elaborates the dimensions of both international technology transfer and absorptive capacity concepts and then operationalizes them in the Iranian National Engine (EF7) Project. With respect to this, four hypotheses are proposed and tested in five manufacturing companies namely – STYM, Laton, IMPC, Mashad Washer and FaraSanat – those which engaged in the project. The results show that the level of companies’ absorptive capacity significantly affects the effectiveness of technology transfer project. The companies with higher level of absorptive capacity were able to achieve a higher level of technological capabilities.