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While research has produced ample evidence showing that absorptive capacity affects innovation and organizational performance outcomes, we still know little about why some organizations possess greater absorptive capacity than others. This study extends previous research by showing how absorptive capacity emerges as an unintended consequence from organizational boundary spanners� external and internal relational embeddedness and their relational empowerment. Drawing upon survey data from 218 inter-organizational projects in the German engineering industry, we propose and find empirically that potential and realized absorptive capacity have partially distinct antecedents. Moreover, we show that the two components of absorptive capacity unfold not only separate but also complementary effects on innovation, implying that the whole of absorptive capacity is greater than its parts. In examining how different components of absorptive capacity emerge and unfold their effects, this study addresses critical limitations of the literature on absorptive capacity
