Knowledge absorptive capacity and project innovativeness: the moderating role of internal and external social capital

Social capital is a “double-edged” sword. This study has investigated the role of knowledge absorptive capacity on project innovativeness and also examined the contingent effect of internal and external social capital on the said relationship. Data were collected from the employees of project teams working in project-based IT firms of Sichuan, province of China. Data collection process yielded 211 valid responses from 46 firms. Data were analysed by using SmartPLS 3. The research has found that the direct link between knowledge absorptive capacity and project innovativeness is substantially positive, as theorised; nevertheless, internal and external social capital has a negative moderating effect on said relationship as they attain the value higher than their mean level. By providing empirical evidences of its significance for project innovativeness, the study contributes significantly to the literature of knowledge absorptive capacity and innovative project management. Moreover, the study also enriches the social capital literature and provides empirical evidence of its negative behaviour towards project innovativeness, in Chinese “guanxi” culture. Furthermore, the study insists that the practitioner should carry out a vigilant cost-benefit analysis, since an extensive social capital significantly deteriorates the project innovativeness.