Supply chain network structure and firm's R&D investments: empirical evidence from Chinese manufacturing firms

Abstract

Purpose: the purpose of this research is to investigate the R&D investment (RDI) of manufacturing firms from the perspective of supply chain network, especially the effect of firms' supply chain network structures (network power and network cohesion) on its RDI, and further to explore the contingency conditions of this effect within the context of Chinese manufacturing supply chains. 

Design/methodology/approach: the authors collect a large sample of Chinese manufacturing firms over the period 2014–2019 and construct a large-scale supply chain network, and finally obtain 2,390 firms from 20,483 observations. Ordinary least squares regression was adopted to analyse how supply chain network structures affect RDI in manufacturing firms. 

Findings: it is surprising that firm's supply chain network structures have a negative effect on RDI. In addition, knowledge and technology intensity (KTI) positively moderate the relationship between network cohesion and RDI. 

Originality/value: this study contributes to the innovation stream from the perspectives of supply chain network, and provides the empirical findings that the negative role of a firm's supply chain network structure on its RDI for the first time. The rationale for these negative effects is straightforward according to the social capital theory that manufacturing firms with a high level of social capital that are possibly to accept established patterns of thinking and behaviour, causing them to decrease the enthusiasm of RDI.

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