Unpacking the relationship between formal contracts and alliance innovation performance: the role of relationship learning and guanxi

Abstract

Purpose

The purpose of this study is to examine how formal contracts affect alliance innovation performance. To understand the mechanism underlying the impact, this study tests whether relationship learning mediates the impact of formal contracts on alliance innovation performance and how guanxi moderates the mediating effect.

Design/methodology/approach

This study is conducted with a sample of 225 manufacturers in China. This paper used hierarchical regression analysis to test the hypotheses and used the PROCESS method to test the mediating effect of relationship learning.

Findings

Formal contracts positively affect relationship learning, which facilitates alliance innovation performance. Guanxi positively moderates the effect of formal contracts on alliance innovation performance. Relationship learning mediates the relationship between formal contracts and alliance innovation performance. Moreover, guanxi positively moderates the mediating effect.

Research limitations/implications

Future research could investigate factors moderating the effect of guanxi on alliance innovation performance and moderating the effect of relationship learning on alliance innovation performance. Future research can also use secondary data to measure alliance innovation performance. Future researchers can examine how guanxi as a relational mechanism governance affects relationship learning.

Practical implications

Managers should conduct relationship learning in the process of alliance innovation and realize that reducing opportunism does not mean improving innovation performance. Moreover, managers should know that guanxi could contribute to alliance innovation performance with the help of formal contracts.

Originality/value

Prior studies have mainly focused on the fundamental requirement of governing knowledge exchange in alliances. Little is known about the mediating effect of relationship learning on the relationship between formal contracts and outcomes of innovation alliances. This study contributes to the literature by filling the gap.

Citation

Liu, D., Bao, Y. and Wang, G. (2022), "Unpacking the relationship between formal contracts and alliance innovation performance: the role of relationship learning and guanxi", Journal of Business & Industrial Marketing, Vol. 37 No. 3, pp. 564-577. https://doi.org/10.1108/JBIM-09-2018-0274