Regional absorptive capacity: a review.

Purpose – Since the definition of the concept “firm’s absorptive capacity” (Cohen and Levinthal, 1990) several scholars have focused on understanding how firms, regions and countries could make it easier to decode and seize information coming from different sources in an economically efficient manner. However, the development of absorptive capacity requires more than a mere exposition to, and familiarization with, the relevant prior knowledge. In fact, learning crucially depends on the intensity of the effort, has a cumulative pattern, and (learning) performance is greatest when the object of learning is related to what is already known (Caragliu, and Nijkamp, 2012). Despite the (absorptive capacity) concept were initially designed in the context of firm theory, it was argued that it can be extended to other kind of institutions, such as countries and regions. In this context, it is argued that technical, formalized knowledge does not capture the entire set of norms, uses and attitudes that also constitute a society’s knowledge. Thus, a proper definition of regional knowledge and regional absorptive capacity should include all types of knowledge, including not only the technical one, but also a society’s attitude towards learning. The concept of cognitive capital was identified as capable of encompassing all these aspects (characterizing regional knowledge), thus properly measuring a region’s absorptive capacity. Henry (2004) defined cognitive capital as the set of cognitive dispositions of agents towards socio-economic interactions. Basing on these premises, the aim of the present review is to resume various theoretical and empirical evidences emerged in the past, in order to highlight the main issues addressed in previous study and to propose promising avenues for future research on the topic. Design/methodology/approach –Review of the past and recent literature on the topic. Originality/value – This review is one of the few studies attempting to resume various theoretical and empirical evidences emerged in the growing debate on the topic investigated. The review evinced how regional absorptive capacity depends on the region’s endowment with cognitive capital, defined as a set of all local, spatially bounded characteristics that determine a region’s capability to grow (Caragliu, and Nijkamp, 2012). The review also propose that a region’s inadequate endowment of cognitive capital may cause locally produced knowledge to spill over to adjacent competing regions. Practical implications – The main implications deriving from this review are indications for policymakers at the local/regional/country level. Policymakers and governors can reflect on the emerged suggestions in order to enhance the regional absorptive capacity of their specific territories.