Abstract:

Most studies on knowledge spillover hypothesis testing are limited to its occurrence and impact on improving the productivity or performance of the recipient companies. In this study a model is constructed of how to use knowledge spillovers from the provider to the beneficiary company, in the context of the textile industry in Indonesia. The model suggests that the knowledge obtained from the buyer may increase the innovation of domestic enterprise suppliers. The model also represents the possibility of knowledge spillover from labour turnover and the imitation process. A survey was carried out to measure the variables of the study conducted by distributing questionnaires to the marketing manager, human resource manager and operations manager of textile companies. The structural equation model was used to test the hypothesis. The results state that a company with better knowledge management can take advantage of knowledge spillover to produce innovative products that are more accepted by the market.