Do more friends make your way smooth? Supply chain relationships, moral disengagement, and innovation performance

Abstract

As the supply chain becomes a key carrier of firms' operations, the relationship between suppliers and buyers increasingly influences their strategic decision-making effectiveness. Nevertheless, existing research exhibits inconsistent conclusions regarding the effect of supply chain relationships on suppliers' innovation performance. To address this challenge, we apply social exchange theory to categorize relationships into instrumental and expressive ties, aiming for a fine-grained elucidation of how supply chain relationships affect suppliers' innovation performance. Based on data collected from 226 Chinese companies, our study reveals the following findings: (a) instrumental ties between suppliers and their buyers lead to the suppliers' moral disengagement, subsequently diminishing their innovation performance; (b) expressive ties between suppliers and their buyers reduce the suppliers' moral disengagement, thereby enhancing their innovation performance; (c) the corporate reputation moderates the mediating effect of moral disengagement on the relationship between instrumental ties and suppliers' innovation performance, but does not exert an influence on the indirect effect between expressive ties and suppliers' innovation performance via moral disengagement. This study enriches the value effects of supply chain relationships on suppliers' innovation performance by dividing it into instrumental and expressive ties, and further reveals the path and boundary condition of the value effects.