Fostering Collaborations: A Knowledge-Acquisition Strategy for Contract Manufacturers in OEM Relationships

Abstract

Acquiring knowledge through collaborations with OEM buyers is critical for offshore contract manufacturers given its relative resource-deficiency. However, existing research on knowledge transfer within OEM alliances mainly addresses knowledge abuse hazards from the buyers’ stance. We have limited understanding about how the contract manufacturers could alleviate the buyers’ concerns so as to foster a wide array of joint projects. Adopting lenses of transaction cost economics and relational view, this study hypothesizes that buyer-specific tangible/ intangible/ site assets and relational capital will contribute to collaborations in international OEM relationships. The arguments by and large find empirical support in data collected from 110 dyadic relationships between OEM buyers and Taiwan contract manufacturers in information industries. Overall, this study sheds light on the mechanisms to enhance collaborations and entails a knowledge acquisition strategy for resource-poor contract manufacturers mostly from emerging markets.