BUSINESS INCUBATION CENTER SUPPORT AND STARTUP PERFORMANCE: A SERIAL MEDIATION MODEL OF POTENTIAL AND REALIZED ABSORPTIVE CAPACITY

Abstract

Business incubation centers have emerged as an important mechanism for supporting startup development. Through various business support services, they enhance the survival and growth of early-stage ventures. Drawing upon the absorptive capacity perspective, this study examines the relationship between business incubation center support and startup performance through the mediating role of potential absorptive capacity and realized absorptive capacity. Data were collected from 206 incubated startups operating under public and private incubation centers across Pakistan. The study uses a census-based sampling approach to collect data. The proposed relationships were tested using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that business incubation center support positively impacts potential absorptive capacity, which subsequently enhances realized absorptive capacity. Realized absorptive capacity also has a significant relationship with startup performance. Furthermore, the serial mediation of potential and realized absorptive capacity between the relationship of business incubation center support and startup performance was also found to be significant. The study offers theoretical and practical implications for incubation managers, entrepreneurs, and policy makers.