Despite the importance of knowledge processes in building absorptive capacity, we are less clear about the micro-processes of absorptive capacity development and particularly about the role of individuals' knowledge processes.

This study empirically examined, via an in-depth case study, the microfoundations of absorptive capacity and their influence on building absorptive capacity in an automaker across the course of four product innovation projects.

Findings suggested that dynamics in a knowledge environment informed individual-level tacit and explicit knowledge processes. In return, knowledge processes at the individual level informed organizational learning processes and the emergence of knowledge processes at organization level for acquisition, assimilation, transformation, and exploitation of new knowledge.

This study contributes to the literature by revealing individuals' knowledge processes from which absorptive capacity emerges. Practically, managers can use the findings of this study to promote certain knowledge processes to develop intended aspects of absorptive capacity at an individual level.