How supplier concentration impacts a buyer firm's R&D intensity: testing a mediation and moderation model
International Journal of Operations & Production Management
ISSN: 0144-3577
Article publication date: 1 May 2023
Issue publication date: 2 January 2024
Abstract
Purpose
The purpose of this paper is to investigate how supplier concentration influences a buyer firm's R&D intensity. This study proposes a mediation and moderation model to test this relationship in the Chinese household appliance industry. Specifically, this study tests the mediation effect of operational slack on the relationship between supplier concentration and R&D intensity and the moderation effect of financial constraints on this relationship.
Design/methodology/approach
Drawing upon real options theory and resource dependence theory, the proposed relationships are tested with the Chinese household appliance market using financial data from listed companies over a ten-year span from 2012 to 2021. Fixed effects (within-group) panel regression models are used to test the hypotheses. In addition, the authors use the bias-corrected bootstrap method to test the mediation effect.
Findings
The authors find that supplier concentration negatively affects a buyer firm's R&D intensity and that internal operational slack mediates this relationship. Interestingly, financial constraints from the external financing organization weaken the negative relationship between the buyer firm's supplier concentration and R&D intensity.
Originality/value
Based on the argument of real options theory and resource dependence theory, this study provides novel insights into the issue of how concentration on several major suppliers may reduce buyer firms' R&D intensity. First, this study introduces operational slack as a form of internal uncertainty that mediates the supplier concentration–R&D intensity relationship. Second, this study suggests that the effect of supplier concentration on R&D intensity is contingent upon firms' financial constraints from external financial organizations, disclosing a synergetic interactive effect of supplier concentration and financial constraints on firms' R&D activities. Third, this study is conducted in the unique institutional context of China, providing meaningful insights into the relationship between supplier concentration and R&D intensity.
Keywords
Acknowledgements
This research was supported by the Guangdong Basic and Applied Basic Research Foundation, China (#2020A1515111022 and #2021A1515011833) and the National Natural Science Foundation of China (#U1901222, #72034002, #72262004, #71761004).
Citation
Yang, J., Zhang, S., Wang, Z. and Zhao, X. (2024), "How supplier concentration impacts a buyer firm's R&D intensity: testing a mediation and moderation model", International Journal of Operations & Production Management, Vol. 44 No. 1, pp. 133-154. https://doi.org/10.1108/IJOPM-02-2022-0144
Publisher
:Emerald Publishing Limited
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