Drawing on social exchange theory, this study develops
a longitudinal theoretical framework of supplier participation
in buyers’ new product development (NPD) activities.
The study focuses on the longitudinal temporal dynamics
of supplier involvement in buyers’ new product development
and postulates that working relations and inter-dependence
impact suppliers’ attitudes toward co-innovation and suppliers’
co-innovation behaviors. Applying this framework to
a 10-year longitudinal dataset from the North American automotive
industry, the drivers of the escalation of supplier involvement
in buyers’ NPD over time and the effect of this
involvement on innovation performance, buyer sales performance,
and supplier sales performance are identified. The
results indicate that buyer–supplier communication, suppliers’
anticipated long-term returns, suppliers’ trust of a buyer, and
supplier–buyer inter-dependence all play a significant role in
changing supplier attitudes toward co-innovation and supplier
involvement in a buyer’s NPD. Further, the study also shows
that supplier involvement in buyer new product development
is mutually beneficial for both the buyer and the supplier as it
increases performance of both parties. Performance returns are
actually greater for suppliers than for buyers. As such, this
study contributes to both relationship management and new
product development literature streams, as well as providing
practical direction to manufacturers as to how they can increase
suppliers’ involvement in their NPD to benefit both
parties.
Drawing on social exchange theory, this study developsa longitudinal theoretical framework of supplier participationin buyers’ new product development (NPD) activities.The study focuses on the longitudinal temporal dynamicsof supplier involvement in buyers’ new product developmentand postulates that working relations and inter-dependenceimpact suppliers’ attitudes toward co-innovation and suppliers’co-innovation behaviors. Applying this framework toa 10-year longitudinal dataset from the North American automotiveindustry, the drivers of the escalation of supplier involvementin buyers’ NPD over time and the effect of thisinvolvement on innovation performance, buyer sales performance,and supplier sales performance are identified. Theresults indicate that buyer–supplier communication, suppliers’anticipated long-term returns, suppliers’ trust of a buyer, andsupplier–buyer inter-dependence all play a significant role inchanging supplier attitudes toward co-innovation and supplierinvolvement in a buyer’s NPD. Further, the study also showsthat supplier involvement in buyer new product developmentis mutually beneficial for both the buyer and the supplier as itincreases performance of both parties. Performance returns areactually greater for suppliers than for buyers. As such, thisstudy contributes to both relationship management and newproduct development literature streams, as well as providingpractical direction to manufacturers as to how they can increasesuppliers’ involvement in their NPD to benefit bothparties.
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