Abstract: This study investigates the roles of knowledge
acquisition, absorptive capacity, and innovation capability in finance
and manufacturing industries. With 362 valid questionnaires from
manufactures and financial industries in Taiwan, we examine the
relationships between absorptive capacity, knowledge acquisition and
innovation capability using a structural equation model. The results
indicate that absorptive capacity is the mediator between knowledge
acquisition and innovation capability, and that knowledge acquisition
has a positive effect on absorptive capacity.