Enhancing the performance of supplier involvement in new product development: the enabling roles of social media and firm capabilities

Abstract

Purpose Drawing on complementarity theory, the purpose of this study is to posit that social media use enhances the effect of supplier involvement on new product development (NPD) performance, while two key firm capabilities further enhance the moderating effect of social media use: market and technological knowledge-processing capabilities. Design/methodology/approach To test the hypotheses, the authors used a longitudinal survey of 367 firms, from seven major manufacturing industries: information technology (22.1 per cent), automotive industry (19.6 per cent), chemicals (18.2 per cent), textiles (13.3 per cent), machinery (12.5 per cent), energy (10.1 per cent) and others (4.1 per cent). Findings The results support the expectation that social media use and two firm capabilities (market and technological knowledge-processing capabilities) enhance the effect of supplier involvement on NPD performance in terms of product innovativeness, market performance and financial performance. Interestingly, post-hoc analyses indicate that supplier involvement has an inverted U-shaped relationship with product innovativeness. In addition, social media use not only strengthens the positive effect of, but also alleviates the negative effect of, supplier involvement in product innovativeness. Research limitations/implications The findings of this study provide new evidence that supply chain members’ use of social media better enables them to enhance their innovation performance with supplier involvement. Practical implications This study provides practical direction to help manufacturing managers enhance innovation performance outcomes of supplier involvement. Originality/value This study makes an original contribution to the supply chain literature by empirically demonstrating the key enablers that increase the efficacy of supplier involvement.