Leveraging Suppliers for Product Innovation Performance: The Moderating Role of Intellectual Capital

Abstract

Abstract:This article scrutinizes the link between supplier leveraging and product innovation performance with the contingency of intellectual capital. Supplier leveraging refers to the utilization of knowledge obtained from suppliers for the benefit of the firm and product innovation performance to the firm’s ability to introduce new and radically different products. Intellectual capital is represented by the trichotomy of structural, human, and social capital. Applying the knowledge-based view, a positive moderation effect emanating from structural and human capital is hypothesized, with however a negative moderation effect emanating from social capital. The expectation for the positive moderation is grounded in the enabling knowledge processing capabilities of structural and human capital, enhancing the effectiveness of supplier leveraging for the generation of product innovation performance. The negative moderation of social capital is suggested due to it likely limiting the transferability and aggregation capacity for knowledge, in addition to also potentially questioning the legitimacy of the suppliers’ information, and thus making knowledge leveraged from suppliers less effective in informing product innovation performance. Data collected from 576 manufacturing firms confirm these hypotheses. Overall, by considering the interplay between supplier leveraging and intellectual capital, and its effect on product innovation performance, this study offers important new insight on the dynamics governing product innovations within supply chains.