Suppliers play an increasingly central role in helping firms achieve their new product development (NPD) goals. The literature implicitly assumes that suppliers are able to meet or exceed the quality standards and technological expectations of the firm, and yet, in practice, suppliers often lack the technological capabilities needed to undertake collaborative NPD. In such situations, a firm may choose to intervene and actively develop the supplier's technological and product development capabilities. We develop a theoretical framework that conceptualizes supplier development activities within interorganizational NPD projects as part of a bilateral knowledge‐sharing process: design recommendations, technical specifications, and new technology flow from supplier to the firm, and in turn, the firm can implement supplier development activities to upgrade the supplier's technological capabilities. Antecedents (supplier responsibility, skills similarity, single sourcing strategy) and consequences of supplier development activities (on supplier, product, and project performance) are examined using a sample of 153 interorganizational NPD projects within UK manufacturers. We find broad support for our hypotheses. In particular, we show that the relational rents (in the form of improved product and project performance) attained from supplier development activities in new product development are not achieved directly, but rather indirectly, via improvements in the supplier's creative and technological capabilities. Our results emphasize the importance of adopting a strategic view of the potential returns available from investing in the NPD capabilities of key suppliers, and provide clues about underlying reasons for the suboptimal experiences of many companies' collaborative NPD projects.

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Purpose-The purpose of this paper is to explore the factors which determine the degree of knowledge transfer in inter-firm new product development (NPD) projects. The authors test a theoretical model exploring how inter-firm knowledge transfer is enabled or hindered by a buyer's learning intent, the degree of supplier protectiveness, inter-firm knowledge ambiguity, and absorptive capacity. Design/methodology/approach-A sample of 153 R&D intensive manufacturing firms in the UK automotive, aerospace, pharmaceutical, electrical, chemical, and general manufacturing industries was used to test the framework. To analyse the data, two-step structural equation modeling in AMOS 7.0 was used. Findings-The results indicate that a buyer's learning intent increases inter-firm knowledge transfer, but also acts as an incentive for suppliers to protect their knowledge. Such defensive measures increase the degree of inter-firm knowledge ambiguity, encouraging buyer firms to invest in absorptive capacity as a means to interpret supplier knowledge, but also increase the degree of knowledge transfer. Practical implications-The paper illustrates the effects of focusing on acquisition, rather than accessing supplier technological knowledge. The paper shows that an overt learning strategy can be detrimental to knowledge transfer between buyer-supplier, as suppliers react by restricting the flow of information. Organisations are encouraged to consider this dynamic when engaging in multi-organisational, NPD projects. Originality/value-The paper examines the dynamics of knowledge transfer within inter-firm NPD projects, showing how transfer is influenced by the buyer firm's learning intention, supplier's response, characteristics of the relationship and knowledge to be transferred.

According to Marshall's agglomeration theory, Krugman's New Economic Geography models, and Porter's cluster policies, firms should receive increasing returns from a trinity of agglomeration economies: a local pool of skilled labour, local supplier linkages, and local knowledge spillovers. Recent evolutionary theories suggest that whether agglomeration economies generate increasing returns or diminishing returns depends on time, and especially the evolution of the industry life cycle. At the start of the 21st century, we re-examine Marshall's trinity of agglomeration economies in the city-region where he discovered them. The econometric results from our multivariate regression models are the polar opposite of Marshall's. During the later stages of the industry life cycle, Marshall's agglomeration economies decrease the economic performance of firms and create widespread diminishing returns for the economic development of the city-region, which has evolved to become one of the poorest cityregions in Europe.

This article investigates the development of supplier-supplier innovations that occur when two firms that are part of the same supply network co-patent a new product. This study unravels how the structure of the supply network influences each firm's ability to form supplier-supplier innovations with other network members. Specifically, we investigate how supplier degree centrality influences the generation of supplier-supplier innovations, and the extent to which this relationship is moderated by the structural embeddedness of firms in the supply network. Using data from the Toyota supply network, the results reveal that a firm's ability to co-develop supplier-supplier innovations with other network members depends on its number of ties and their direction within the supply network. Although betweenness centrality has no significant moderating effect, closeness centrality, and embeddedness in small world clusters negatively moderate the relationship between supplier degree centrality and supplier-supplier innovations. Additionally, the number of manufacturing plants a firm operates in Japan strengthens the positive effect supplier degree centrality has on the development of supplier-supplier innovations.