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A longitudinal analysis of supplier involvement in buyers’ new product development: working relations, inter-dependence, co-innovation, and performance outcomes

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Abstract

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.

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Notes

  1. The empirical model uses variables lagged by 1 and 2 years, hence the need for 3-year rolling windows. The lower number of observations for the first three time periods is due to missing North American annual report data for Japanese OEMs.

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Authors and Affiliations

  1. Supply Chain Management and Marketing Sciences Department, Rutgers Business School, Rutgers University, Newark and New Brunswick, NJ, USA

    Sengun Yeniyurt

  2. School of Business Administration, Oakland University, Rochester, MI, 49309, USA

    John W. Henke Jr.

  3. Peter T. Paul College of Business and Economics, University of New Hampshire, Durham, NH, 03824, USA

    Goksel Yalcinkaya

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  1. Sengun Yeniyurt
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  2. John W. Henke Jr.
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  3. Goksel Yalcinkaya
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Correspondence to Sengun Yeniyurt.

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Yeniyurt, S., Henke, J.W. & Yalcinkaya, G. A longitudinal analysis of supplier involvement in buyers’ new product development: working relations, inter-dependence, co-innovation, and performance outcomes. J. of the Acad. Mark. Sci. 42, 291–308 (2014). https://doi.org/10.1007/s11747-013-0360-7

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