Does supplier involvement enhance financial performance? The encapsulation effects of product modularity and smartness
ISSN: 1359-8546
Article publication date: 31 December 2021
Issue publication date: 17 February 2022
Abstract
Purpose
This study aims to explore the conditional relationships between supplier involvement and financial performance. From a problem-solving perspective, this study takes the focal firm as a problem-solving system. It is postulated that supplier involvement enhances financial performance by helping solve complex problems of new product development. Furthermore, product modularity and smartness are considered contingent factors to clarify the boundary conditions.
Design/methodology/approach
The ordinary least squares regression was conducted to test the hypotheses based on survey data from 136 high-tech firms in China.
Findings
Supplier involvement is positively related to financial performance. Product modularity weakens the impact of supplier involvement on financial performance. Furthermore, product smartness strengthens the negative influence of product modularity on the relationship between supplier involvement and financial performance.
Originality/value
This study combines supplier involvement with product attributes. It takes a problem-solving perspective to rethink suppliers’ roles in new product development as problem-solvers rather than resource holders. Furthermore, this study advances the encapsulation effects of product modularity and smartness to influence the supplier involvement–financial performance link.
Keywords
Acknowledgements
The authors thank Wagner Beverly, Graham Gary, and the anonymous reviewers for their insightful comments and guidance. This study was supported by Yunnan Deng Ronglin Education Foundation, the Program for Innovation Research in Central University of Finance and Economics, the Research Foundation for Youth Scholars of Beijing Technology and Business University, the 2020 Education and Teaching Reform Project of Central University of Finance and Economics under Grant No. 2020ZXJG12, the National Natural Science Foundation of China under Grant Nos 71302128, 71774182, 71732006, and the National Social Science Foundation of China under Grant No. 19BGL096.
Citation
Wang, Y., Jia, T., Chen, J. and Chen, Q. (2022), "Does supplier involvement enhance financial performance? The encapsulation effects of product modularity and smartness", Supply Chain Management, Vol. 27 No. 2, pp. 144-161. https://doi.org/10.1108/SCM-01-2021-0051
Publisher
:Emerald Publishing Limited
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