Suppliers’ local network embeddedness and buyers’ joint innovation

Abstract

Purpose The purpose of this paper is to investigate the effects of original equipment manufacturing suppliers’ local network embeddedness on buyers’ relative attention and joint innovation through service innovation competence. Design/methodology/approach A structural equation model was analyzed using AMOS 21 with data derived from 165 buyers in the Taiwanese electronics industry. Findings From the buyer perspective, suppliers with embedded network relationships in emerging markets are perceived to be service oriented and to have relative attention and joint innovation that are attractive to buyers. In addition, the findings of empirical testing conducted in this study suggest that perceived exploitative and explorative service innovation competence partially mediate the relationship between perceived network embeddedness and relative attention, while explorative service innovation competence partially mediates the influence of perceived network embeddedness on buyers’ joint innovation. Originality/value This study innovatively employed a buyer perspective to examine the servitization of manufacturing suppliers and the effects of this on the buyer–supplier relationship, providing new insights into the role of service innovation competence as well as important theoretical and managerial implications.