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Absorptive capacity is an important determinant of a routine-based firm performance. However, there is need to validate its impact on project-driven firm performance such as in construction companies. In this article, we conceptualize absorptive capacity and firm performance as third-order hierarchical constructs. Our model is tested based on the impact of absorptive capacity on firm performance by using survey data from a sample of 158 project managers in construction companies belonging to the Federation of Construction Industries (FOCI). Using the partial least square structural equation model (PLS-SEM) approach for the hierarchical order constructs (HOC), the findings from the research corroborate most of the earlier studies as well as contrasting relationship between the realised absorptive capacity and financial performance (β = -0.029, t = 0.565). The study offers useful insight into the experiential relationship for our conceptualization and its influence on project-driven firm performancAbsorptive capacity is an important determinant of a routine-based firm performance. However, there is need to validate its impact on project-driven firm performance such as in construction companies. In this article, we conceptualize absorptive capacity and firm performance as third-order hierarchical constructs. Our model is tested based on the impact of absorptive capacity on firm performance by using survey data from a sample of 158 project managers in construction companies belonging to the Federation of Construction Industries (FOCI). Using the partial least square structural equation model (PLS-SEM) approach for the hierarchical order constructs (HOC), the findings from the research corroborate most of the earlier studies as well as contrasting relationship between the realised absorptive capacity and financial performance (β = -0.029, t = 0.565). The study offers useful insight into the experiential relationship for our conceptualization and its influence on project-driven firm performance.