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Logistics service innovation by third party logistics providers in China: Aligning guanxi and organizational structure

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  • Chu, Zhaofang
  • Feng, Bo
  • Lai, Fujun

Abstract

In response to intensifying competition and escalating customer expectations, third-party logistics (3PL) providers need to become more innovative. In logistics service innovation, external relationships are important sources of resources and knowledge. Drawing on social capital theory and the strategy-structure-performance paradigm, this study proposes that guanxi (Chinese system of social networks and relationships that facilitates business and other dealings), expedites logistics service innovation by 3PL providers in China. This study also proposes that the effect of guanxi on logistics service innovation is contingent on the alignment between the type of guanxi and the provider’s organizational structure. We tested our proposed model using survey data from 165 3PL providers in China. Our findings suggest that both political and business guanxi have a positive effect on logistics service innovation; however, those types of guanxi should be used in consideration of the firm’s organizational structure. The results suggest that with respect to logistics service innovation, political guanxi is more effective for 3PL providers whose organizational structure is highly centralized or has low formalization. The converse applies to business guanxi.

Suggested Citation

  • Chu, Zhaofang & Feng, Bo & Lai, Fujun, 2018. "Logistics service innovation by third party logistics providers in China: Aligning guanxi and organizational structure," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 291-307.
    • Handle: RePEc:eee:transe:v:118:y:2018:i:c:p:291-307
    DOI: 10.1016/j.tre.2018.08.007
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    5. Parvez Alam Khan & Satirenjit Kaur Johl & Shakeb Akhtar, 2021. "Firm Sustainable Development Goals and Firm Financial Performance through the Lens of Green Innovation Practices and Reporting: A Proactive Approach," JRFM, MDPI, vol. 14(12), pages 1-23, December.
    6. Benlu Xin & Wentao Zhang & Wei Zhang & Catherine Xiaocui Lou & Himanshu Kumar Shee, 2023. "Strategic Entrepreneurship and Sustainable Supply Chain Innovation from the Perspective of Collaborative Advantage," Sustainability, MDPI, vol. 15(17), pages 1-21, August.
    7. Ge, Zehui & Hu, Qiying & Goh, Chon-Huat & Zhao, Rui, 2021. "Action-dependent commitment in vertical collaborations: The effect of demand-creating innovations in a supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 147(C).
    8. Veslav Kuranovič & Edgar Sokolovskij & Darius Bazaras & Aldona Jarašūnienė & Kristina Čižiūnienė, 2023. "Estimating the Intensity of Cargo Flows in Warehouses by Applying Guanxi Principles," Sustainability, MDPI, vol. 15(23), pages 1-22, November.
    9. Dan He & Jialiang Yang & Zhengming Wang & Wenchao Li, 2020. "Has the manufacturing policy helped to promote the logistics industry?," PLOS ONE, Public Library of Science, vol. 15(7), pages 1-21, July.
    10. Qining Deng & K. Noorliza, 2023. "Integration, Resilience, and Innovation Capability Enhance LSPs’ Operational Performance," Sustainability, MDPI, vol. 15(2), pages 1-22, January.
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