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The purpose of this paper is to investigate the effect of supply chain integration (SCI) in terms of supplier integration, customer integration, and internal integration on knowledge management (KM) and technical innovation (TI). The study also investigates the effect of KM on TI. Furthermore, the mediating effect of KM on the relationship between SCI and TI is investigated.

Study model and hypotheses were developed based on literature review. The study is based on survey data collected from 217 Jordanian manufacturing companies in electrical, electronics, machinery, and mechanical appliances industries. Exploratory factor analysis and confirmatory factor analysis were applied to assess construct validity. Direct and indirect effects were tested using structural equation modeling and bootstrap re-sampling technique.

The results reveal that supplier integration and customer integration have positive effects on KM and TI, while internal integration has not. Also, KM has a positive effect on TI. In addition, KM mediates supplier integration-TI and customer integration-TI relationships, while does not mediate internal integration-TI relationship.

Most existing studies examined the effect of KM on SCI and supply chain management. This study argues and empirically demonstrates that SCI contributes to KM capability of manufacturing companies. Moreover, this is one of the first studies to investigate the mediating role of KM on SCI-TI relationship. The paper provides evidence that external integration is superior to internal integration in enhancing KM and TI.