Operationalising absorptive capacity in tourism SMEs: microfoundations of PACAP–RACAP conversion

Tourism SMEs operate in knowledge-intensive, service-dominated settings where competitive advantage depends on the ability to recognise external signals, translate them into organisational routines, and continuously innovate and refresh offerings (Cooper, 2006; Hall & Williams, 2008; Shaw & Williams, 2009). While they are often lauded for adaptability and frequent, incremental improvements (Pikkemaat & Peters, 2006), their underlying innovation processes remain unevenly theorised, mainly because their practices are fragmented, informal, and embedded in day-to-day operations rather than formal R&D structures (Hall & Williams, 2008; Hjalager, 2010). The ACAP literature has long recognised the critical distinction between PACAP, the acquisition and assimilation of external knowledge, and RACAP, the transformation and exploitation of that knowledge into operational outcomes (Volberda et al., 2010; Zahra & George, 2002). Whilst this conceptual framework has been extensively theorised, the actual mechanisms through which organisations convert PACAP into RACAP remain empirically underexplored, particularly in the context of SMEs operating in service-intensive sectors (Flatten et al., 2011; Noblet et al., 2011).