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Value, also known as co-creation, is recognized as the outcome of collaborative efforts between both parties. However, knowledge is currently limited regarding the motivations and mechanisms driving customers to engage in co-production and value co-creation. Therefore, the current study aims to investigate co-production in enhancing value co-creation. Previous research has predominantly explored the linear effects of commitment and asset specificity on co-production. To expand on this foundation, our study goes a step further by including the potential quadratic effects of commitment and asset specificity on co-production. Although moderate levels of commitment and asset specificity may enhance co-production, higher levels are implied to possibly impede it. Considering that co-production requires collaboration between customers and service employees, this study includes the characteristics of service employees, such as self-monitoring and self-efficacy, identifying their moderating roles in aiding active co-production and ultimately enhancing the value co-creation.

We employed linear, nonlinear and hierarchical moderated regression analysis to test our hypotheses.

Our findings provide evidence for the positive linear effects and negative quadratic effects between commitment, asset specificity and co-production. The inverted-U relationships suggest an existing optimal commitment and asset specificity that maximize co-production. Results also suggest that co-production influences value co-creation and self-efficacy and self-monitoring positively moderates the relationship between co-production and value co-creation.

By applying the core provisions of S-D logic, this study contributes to marketing literature by analyzing the dyadic process of co-production. Dyadic data collection from both customers and service employees provides a comprehensive understanding of the co-production process, allowing academics to recognize service employees’ self-efficacy and self-monitoring that contribute to effective co-production and value co-creation in service processes.