Abstract

This paper aims to examine the effect of knowledge sharing capability, knowledge absortive capacity and product innovation capability on business performance. Respondents of this study were 100 fashion SMEs owners or leaders in Semarang. A hierarchical regression analysis was used to examine the relationship between knowledge sharing capability, knowledge absortive capacity on business performance with product innovation capability as intervening variabel. This study found that knowledge sharing capability, knowledge absortive capacity have a significant effect on product innovation capability and business performance. Furthermore, product innovation capability can be a mediator of the relationship between knowledge sharing capability, knowledge absortive capacity on business performance.

Keywords: Knowledge sharing capability, knowledge absortive capacity, product innovation capability, business performance