Supplier dependence and R&D intensity: The moderating role of network centrality and interconnectedness
Document Type
Article
Publication Date
11-1-2018
Abstract
This study examines whether financial dependence upon a few customers is negatively related to the allocation of innovation resources of supplier firms. Furthermore, this study investigates whether these negative effects of supplier dependence on research and development (R&D) intensity are reduced when the supplier leverages social capital conceptualized in terms of eigenvector centrality and interconnectedness. Using panel data, we find that a supplier firm's dependence upon major customers has a negative relationship with the supplier firm's R&D intensity. Our results, however, reveal that a dependent supplier having high eigenvector centrality or working with other companies that are densely connected to each other mitigates the negative effects of supplier dependence on R&D intensity. These findings highlight the importance of external information or resources being available in supply networks when suppliers that are dependent upon major customers explore and exploit opportunities for new product development.
Publication Title
Journal of Operations Management
Volume
64
First Page
7
Last Page
18
Digital Object Identifier (DOI)
10.1016/j.jom.2018.11.002
ISSN
02726963
Citation Information
Kim, & Zhu, P. (2018). Supplier dependence and R&D intensity: The moderating role of network centrality and interconnectedness. Journal of Operations Management, 64(1), 7–18. https://doi.org/10.1016/j.jom.2018.11.002