12 / 2024-04-03 15:57:24

Performance Impact of Overlapping Suppliers on Buyers’ Innovation: Critical Role of Technological Breadth and Relationship Strength

Technological innovation performance,knowledge resource,Organizational learning

Previous research has explored different viewpoints on buyer-supplier relationships. Some studies suggest that regularly switching suppliers is beneficial for acquiring new knowledge, while others emphasize cultivating long-term relationships. This study aims to investigate an underexplored aspect of buyer-supplier networks: the situation where the same suppliers have relationships with multiple buyers, referred to as overlapping suppliers. The purpose of this study is to explore under what conditions the impact of overlapping suppliers leads to superior innovation performance of the buyers. In particular, this study investigates the moderating roles of relationship duration, relationship value, and technological breadth of suppliers in overlapping suppliers-innovation performance relationships.



Our main argument is that relationships with overlapping suppliers expose buyers to a broader set of new knowledge, thus contributing to the innovation performance of buyers. We also found that if an overlapping supplier is highly specialized (narrow technological breadth), it can negatively moderate the relationship between the overlapping supplier and the innovation performance of buyer. Furthermore, if the relationship value (in dollars term) is high, it will positively moderate the relationship between overlapping suppliers and the innovation performance of buyers.



The focus of this study is on the global semiconductor industry during the period from 2006 to 2021. The data was collected from multiple archival sources such as Bloomberg SPLC, USPTO, Refinitiv Eikon, and annual reports of buyer and supplier firms. The nature of data is the unbalanced panel with multiple buyers and suppliers located in different regions. To address the nested structure of buyers and suppliers within geographical regions, multilevel regression modeling (MLM) has been employed.



This study finds that relationships with overlapping suppliers provide buyers with a broader set of new knowledge, thus contributing to the innovation performance of buyers. We also found that, if the relationship duration is high, it will negatively moderate the relationship between overlapping suppliers and the innovation performance of buyers. Furthermore, if an overlapping supplier has greater technological breadth, it positively moderates the relationship between the overlapping supplier and the innovation performance of the buyer.



This study has investigated under what conditions overlapping suppliers can enhance buyer’s innovation performance. In this regard, this study identifies two moderating factors - relationship duration and technological breadth- that can moderate the relationship between overlapping suppliers and buyer’s innovation performance. By doing so, the study offers a nuanced perspective and contributes to the broader discourse within the supply chain management literature regarding the performance impact of supply chain network connectivity.