Companies increasingly regard relationships with other companies as a source of competitive advantage. Relationships constitute a context in which the firm may learn and build absorptive capacity. This study provides an in-depth explanation of the key mechanisms that interlace the different learning processes leading to innovations in a relational context. A theoretical elaboration of these mechanisms precedes their empirical study within four customer-supplier dyads, centred on two focal customer organizations.The article contributes by discussing how the mechanisms act and interact to create absorptive capacity for a focal firm across relationships. We find that structural learning mechanisms, while necessary are not sufficient to explain variation in the presence of absorptive capacity across different learning contexts. Cultural, psychological and policy learning mechanisms complement the picture. From the empirical analysis we derive propositions to guide further research into the creation of absorptive capacity in a relational context.
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