Purpose – The purpose of this paper is to examine the impacts of modularity-based manufacturing practices (MBMP) and manufacturing system integration (MSI) on manufacturing performance (MP) using absorptive capacity as an important enabling factor. Design/methodology/approach – Constructs were developed through a comprehensive literature review. Structural equation modeling was used to test the research model and hypotheses based on a large sample of 303 US manufacturing firms. Findings – Both MBMP and MSI have significant impacts on MP. The positive effects of MBMP on MPare stronger than those of system integration. The absorptive capacity of a firm facilitates better use of modularity practices and system integration. Practical implications – More attention should be given tomodularity practices in resource allocation planning. Also, system integration together with modularity practices can generate significantly higher MP. Originality/value – The paper is the first large-scale empirical study to examine the effects of absorptive capacity on MSI andMBMP,which in turn impactsMP. Furthermore, the findings empirically support that a combination strategy of modularity and system integration can help manufacturing firms to achieve higher performance.

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