The influence of supply network structure on firm innovation

Abstract

a b s t r a c tIn this study, we examine the structural characteristics of supply networks and investigate the relationship between a firm's supply network accessibility and interconnectedness and its innovation output. We also examine potential moderating effects of absorptive capacity and supply network partner innovativeness on innovation output. We hypothesize that firms will experience greater innovation output from (1) higher levels of supply network accessibility and supply network interconnectedness, (2) the interaction between the levels of these two structural characteristics, (3) the moderating role of absorptive capacity on supply network accessibility and the moderating role of supply network partner innovativeness on supply network interconnectedness. Supply network partner relationships are drawn in the context of the electronics industry using data from multiple sources. We use social network analysis to create measures for each supply network structural characteristic. Using regression techniques to test the relationship between these structural characteristics and firm innovation for a sample of 390 firms, our findings suggest that supply network accessibility has a significant association with a firm's innovation output. The results also indicate that interconnected supply networks strengthen the association between supply network accessibility and innovation output. Moreover, the influence of the two structural characteristics on innovation output can be enhanced by a firm's absorptive capacity and level of supply network partner innovativeness. By addressing the need for deeper structural analysis, this study contributes to supply chain research by accounting for the embedded nature of ties in supply networks, and showing how these structural characteristics influence the knowledge and information flows residing within a firm's supply network.

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Toward a Theory of Industrial Supply Networks: A Multi-Level Perspective via Network Analysis

“…Due to the importance of supplier-customer relationships in guiding modern research and practice [1], the main impacts of this research in the field of business management and operation research are apparent. An increasing interest in applying a network analysis approach to understand supply networks (SNs) instead of linear supply chains (SCs) has been observed [2][3][4][5][6][7][8][9][10][11][12][13][14]. SNs have become a new analytic paradigm in SCM, and have been identified as regional clusters [2][3][4]6] or industrial sectors [4,7,8], and are also well known as complex adaptive systems (CAS) [5,[9][10][11][12][13][14][15][16].…”

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