Supply network architecture and its contingent impact on innovation performance: A field study

Using field study data on complete supply networks for 153 components, collected from a large automotive firm and two consumer electronics manufacturers, we characterize the supply networks for the components in terms of social network analysis metrics and examine the impact of direct ties, indirect ties, and their interaction on innovation performance. Analysis of complete networks is essential for a fuller understanding of the influence of supply network architecture on innovation performance, in particular. In addition, we examine the influence of the original equipment manufacturer (OEM) on direct suppliers and its moderating influence on the impact of direct and indirect ties in the supply network on innovation performance. Specifically, we find that the impact of direct ties on innovation performance is significant and positive. Interestingly, the indirect ties negatively moderate the impact of direct ties on innovation performance. Further, we find that the greater the degree of influence the OEM exerts on its direct suppliers, the lower the performance gains. We discuss these findings and their implications for innovation performance.