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Specific investments and supplier sustainable innovation contribution: A moderated nonlinear link

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  • Wu, AiHua

Abstract

A manufacturer's specific investments tailored to a supplier can help the manufacturer to acquire sustainable innovation resources from the supplier as well as pose potential risks to the manufacturer. Drawing on transaction cost economics and relational exchange theory, we propose a nonlinear, concretely inverted U-shaped relationship between the manufacturer's specific investments and the supplier's contributions to the manufacturer's sustainable innovation. Based on contingency theory, we further propose that the nonlinear relationship is conditional on cross-functional collaboration, environmental regulatory pressures and technological uncertainty. The empirical results show a significantly inverted U-shaped relationship between specific investments and supplier contributions to sustainable innovation. Furthermore, cross-functional collaboration and environmental regulatory pressures have significant positive moderating effects on the nonlinear relationship; that is, the inverted U-shaped relationship is stronger when the level of cross-functional collaboration/environmental regulatory pressures is higher. As such, this study extends previous research by revealing the nonlinear relationship of specific investments and supplier contributions, showing cross-functional collaboration and environmental regulatory pressures as two boundary conditions in the link between specific investments and supplier sustainable innovation contributions.

Suggested Citation

  • Wu, AiHua, 2022. "Specific investments and supplier sustainable innovation contribution: A moderated nonlinear link," Technology in Society, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:teinso:v:68:y:2022:i:c:s0160791x2200032x
    DOI: 10.1016/j.techsoc.2022.101891
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