J PROD INNOV MANAG 2010;27:625639

r 2010 Product Development & Management Association

In Chains? An Empirical Study of Antecedents of Supplier Product

Development Activity in the Automotive Industry
Finn Wynstra, Fredrik von Corswant, and Martin Wetzels

In the literature on interorganizational collaboration in product development, considerable attention is given to

supplier role classications. Such classications often link to a suppliers position in the overall supply chain, but the
claim that this position has a substantial impact on its product development activities has seldom been empirically
validated. The results from the present survey among Swedish automotive suppliers demonstrate that supplier
product development activity is signicantly affected by the position of the supplier in the supply chain and the
suppliers strategic focus on innovation. While the latter has a stronger impact on product development activities,
there is also an interaction effect implying that the effects of a suppliers innovation strategy are contingent on its
supply chain position. Contrary to expectations, customer development commitment does not have any signicant
direct effect on supplier product development activities. Instead, this relation is fully mediated by supplier innovation
strategy. These ndings imply that, in contrast to conventional wisdom, product development activities are not
strictly organized in chains. Although supply chains can be useful metaphors for understanding the distribution of
regular production activities between rms, they arguably apply less to the distribution of product development
activities.

Suppliers and Their Role in Product This trend has been particularly salient in large-
Development scale assembly-based industries, such as the automo-
tive sector. Traditionally, especially in Europe and

L
iterature on interorganizational collaboration
in product development has increasingly fo-
cused on buyersupplier relations, as suppli-
ers adopt a larger role in the development of
components, assemblies, and modules (Appleyard,
2003; Brusoni and Prencipe, 2001; Laseter and Ram-
das, 2002; Lawson et al., 2009; Primo and Amundson,
2002; Sobrero and Roberts, 2002; Wagner and Hoegl,
2006). This expanded role is the natural consequence
of the trend to outsource more and more production
to suppliers and the growing realization that decisions
on product design, process design, and manufacturing
often have to be integrated (Fine, 1998). Through
supplier involvement rms can achieve better product
quality, shorter development lead time, and reduced
product and development cost and also better long-
term alignment of technology strategies (Takeishi,
2001; Van Echtelt et al., 2008).
Address correspondence to: Finn Wynstra, Rotterdam School of
Management, Erasmus University, PO Box 1738, 3000 DR Rotterdam,
Netherlands. E-mail: fwynstra@rsm.nl, Tel: 31 10 4081990,
Fax: 31 10 4089014
 The authors wish to acknowledge the useful comments on previous
versions of this article made by colleagues at Erasmus University Rot-
terdam and Eindhoven University of Technology.
North America, most product development has been
performed internally by auto manufacturers (Clark,
1989; Clark and Fujimoto, 1991; Droge, Jayaram,
and Vickery, 2000; Kamath and Liker, 1994; Von
Corswant and Fredriksson, 2002). In Japan, supplier
involvement in product development has historically
been more widespread than in the United States and
Europe (Clark; Clark and Fujimoto; Helper, 1991;
Liker, Ettlie, and Campbell, 1995; Nishiguchi, 1994).
Based on detailed technical specications, suppliers
were then contracted to produce the items. However,
as technological developments and customer demand
changes are occurring more rapidly, auto manufac-
turers have increasingly outsourced design, develop-
ment, and engineering activitiesprimarily at the
level of components and subsystems (Brusoni and
Prencipe, 2001). In a survey among (primarily Euro-
pean) car manufacturers and rst-tier suppliers, Von
Corswant and Fredriksson found that a signicant
decrease has occurred in car manufacturers share of
total product development resources between 1988
and 1998 (from 70 to 60%).
At the same time, various studies have demon-
strated that not all suppliers should or can be involved
in the same way (Bidault, Despres, and Butler, 1998;
626 J PROD INNOV MANAG
2010;27:625639
Sobrero and Roberts, 2001; Wynstra and Ten Pierick,
2000). Supplier involvement is not without cost, time,
and effort and should thus be applied selectively. Fol-
lowing such a contingency model, various studies
have investigated differences in suppliers participa-
tion in product development, particularly in relation
to the type of product delivered by the supplier
(Handeld et al., 1999; Laseter and Ramdas, 2002).
One stream of literature specically suggests that
the level of a suppliers activities in product develop-
ment is contingent upon its position in the supply
chain: the more it is located downstream, the more
active a supplier is in product development (Fujimoto,
2001; Kamath and Liker, 1994). For instance, the
sector study reported earlier found that, after the as-
sembly rms, rst-tier suppliers (i.e., suppliers directly
delivering to assembly rms) are the next most active
party in the supply chain in terms of product devel-
opment. During the 1990s, these suppliers have nearly
doubled their share of total product development re-
sources, from 18 to 31% (Von Corswant and Fred-
riksson, 2002).
Apart from these occasional studies, however,
there is little large-scale empirical evidence to support
or refute the proposition that product development
activities are indeed distributed along the supply
chain, according to some sort of supplier hierarchy.
More specically, prior studies have scarcely investi-
gated the interplay between such generic, structural
variables and more rm-specic, behavioral variables.
BIOGRAPHICAL SKETCHES
Dr. Finn Wynstra is the NEVI Professor of Purchasing and Supply
Management at Rotterdam School of Management at Erasmus
University. He is former editor of the Journal of Purchasing and
Supply Management and past chair of the International Purchasing
and Supply Education and Research Association (IPSERA). His
main research interests are buyersupplier collaboration in new
product development and procurement of services.
Dr. Fredrik von Corswant holds a Ph.D. in supply management at
Chalmers University of Technology. He has been responsible for
product development strategy and supply management at Volvo
Truck Corporation and is currently working as chief project man-
ager within advanced engineering.
Dr. Martin Wetzels is professor of marketing and supply chain re-
search in the Department of Marketing at Maastricht University in
The Netherlands. His main research interests are customer satisfac-
tion and dissatisfaction, customer value, services marketing, busi-
ness-to-business marketing, (online) marketing research, supply
chain management, cross-functional cooperation, e-commerce,
new product development, technology infusion in services, and re-
lationship marketing.
F. WYNSTRA ET AL.
The main intended contribution of this study is
therefore to develop a more detailed understanding
of how and to what extent supply chain position drives
supplier product development activity (SPDA) in the
automotive sector. Do suppliers that are closer to the
nal assembly rm, from a supply chain perspective,
have a more substantive role in product development
than those that are located more upstream? How im-
portant is supply chain position in determining a sup-
pliers activity in product development compared with
factors such as the market strategy of the supplier and
the purchasing behavior of customers? Answering
these questions contributes to emerging research on
interdependencies between supply (chain) management
and product development (Hult and Swan, 2003).
On a broader level, this study seeks to contribute to
the ongoing debate to what extent and how buyer
supplier relations are interrelated. Several research
streams have more or less explicitly criticized the con-
cepts of supply chains and supply chain management,
including various groups of authors from operations
management (Brown et al., 2000; Lamming et al.,
2000) and from business marketing, most notably the
Industrial Marketing and Purchasing (IMP) Group
(Axelsson and Easton, 1992; Hakansson, 1982). In
fact, It may be more accurate to use the terms supply
network or supply web to describe the structure of
most supply chains (Chopra and Meindl, 2001, p. 5).
Mabert and Venkataramanan (1998, p. 538) also de-
ne supply chain as the network of facilities and ac-
tivities that performs the functions of product
development, procurement . . ., the movement of ma-
terials . . ., the manufacturing of products . . . .
Interpreting buyersupplier relations as being in-
terrelated to each other as a network rather than a
chain implies that manufacturers can have intensive
relations with suppliers other than just rst-tier
suppliers. This challenges the more hierarchical view
of supply chains consisting of different tiers of sup-
pliers, each with its typical set of activities and re-
sponsibilities. Even if design and execution of make
and delivery processes follow this logic, it may well be
the case that the distribution of product development
activities and responsibilities among these partners is
quite different (Brusoni, Prencipe, and Pavitt, 2001).
Empirically studying to what extent supply chain po-
sition affects supplier product development activity
may provide further support to either of these con-
icting views: chains versus networks.
From a managerial perspective, studying the rela-
tionships between structure and strategy variables and
ANTECEDENTS OF SUPPLIER PRODUCT DEVELOPMENT ACTIVITY
suppliers product development activities could also
provide relevant insights. For suppliers on different
levels in the supply chain, it could help illuminate
the constraints and opportunities for initiating prod-
uct development activities together with customers.
For customers, it could clarify when and how they
could induce different tiers of suppliers to under-
take (more) product development activities.
The paper rst takes a look at existing research on
the structure of the automotive supply chain and the
distribution of product development activities. The
next section develops the conceptual framework and
hypotheses, followed by the design of the empirical
study: a survey among automotive suppliers in Swe-
den. Subsequently, the ndings from the study are
presented, along with a discussion and conclusions.
Product Development in the Automotive
Supply Chain
The general trend toward more outsourcing in the
automotive industry has increased the importance for
vehicle manufacturers of effectively managing their
suppliers (Dyer, 1996a, 1996b, 2000; Kotabe, Martin,
and Domoto, 2003; Lamming, 1993; Mercer, 1995;
Takeishi, 2001). This applies not only to the nal
manufacturers but also to the direct, rst-tier suppli-
ers, as these suppliers also outsource a growing part of
their activities (Hensley, Irani, and Satpathy, 2003;
Von Corswant and Fredriksson, 2002).
The term supplier tiers was rst used to describe the
various levels in pyramid-shaped supply chains found
in the Japanese automotive (and electronics) industry
(Hines, 1994; Nishiguchi, 1987). First-tier suppliers
provide the auto manufacturer with subassembled
units (e.g., complete seats or instrument panels) based
on components from lower-tier suppliers. First-, sec-
Auto manufacturer
1st tier
suppliers
2nd tier
suppliers
3rd and
4th tier
suppliers
Figure 1: Tiered Supplier Structure (adapted from Clark and Fujimoto, 1991, p. 139)
J PROD INNOV MANAG 627
2010;27:625639
ond-, and third-and-below-tier suppliers tend to differ
signicantly in terms of size and the type of customer
relations (Fujimoto, 2001).
The tier structure is supposed to simplify not only
material ows but also information ows between
customers and suppliers since rst-tier suppliers co-
ordinate the activities of the second tier and so on
down the hierarchy, allowing customers to focus
scarce communication resources on the top tier
(Kamath and Liker, 1994, pp. 156158). Over the
past two decades, North American and European
auto manufacturers have restructured their supply
base according to this tier model (Bidault et al.,
1998; Dyer, 1996a, 2000; Kotabe et al., 2003; Von
Corswant and Fredriksson, 2002). Figure 1 depicts
such a typical, tiered supply chain.
Previous research has argued that product devel-
opment activities tend to be structurally distributed
along this tier structure. Fujimoto (2001) suggests that
rst-tier suppliers are much more likely to have their
own development and engineering capabilities and re-
sponsibilities than second-tier suppliers, whereas
third-tier suppliers fully rely on the engineering activ-
ities of their customers. Similarly, Von Corswant and
Fredriksson (2002) report that the share of second-
and-lower-tier suppliers in total product development
resources in the automotive supply chain has in-
creased signicantly over the past 15 years, still small
compared with that of rst-tier suppliers.
In parts of the literature, a suppliers level of re-
sponsibility or activity in product development is re-
lated to the product type it produces. Specically,
suppliers of complex, comprehensive items are argued
to (ideally) have a larger role in product development
(Handeld et al., 1999; Laseter and Ramdas, 2002).
This implies that, generally, rst-tier supplierswhich
produce relatively more subsystemsare more active
in product development than second-tier suppliers,
Small number of large Illustrative products
suppliers, mostly with delivered: seats,
engineering capability instrument panel
Larger number of
smaller suppliers,
Illustrative products
delivered: plastic
fewer engineering
components, fasteners
capabilities
628 J PROD INNOV MANAG
2010;27:625639
which are more active than third-tier suppliers, and so
on. Kamath and Liker (1994), for example, distin-
guish among partner suppliers, which have extensive
design responsibilities for entire subsystems; mature
suppliers, which develop the critical specications of
complex assemblies; child suppliers, which develop the
detailed specs of simple assemblies together with the
manufacturer; and contractual suppliers, which have
(virtually) no development responsibility for the sim-
ple parts they deliver.
Criticism for the Supply Chain Metaphor
In reality, however, the automotive supply chain is
much more complicated (Brown et al., 2000; Nishigu-
chi, 1987). Lamming (1993, pp. 186190) voices some
critical comments on this view of strictly organized
tiers of suppliers. First of all, suppliers may in fact
deliver components to various customers at different
levels in the supply chain. For instance, they could
operate as rst- and second-tier suppliers simulta-
neously. Second, pointing to the original meaning of
tiers in the Japanese Keiretsu system, Lamming em-
phasizes the necessary element of organizational
alignment between customer and suppliers to be Wynstra, 1998).
able to speak of tier structures (cf. Edwards and Sami-
mi, 1997). In Japan, manufacturers traditionally have
extensive equity stakes in their largest suppliers (Dyer,
1996a; Lamming).
Given these supply chain complexities, a growing
number of researchers suggests that network is a more
suitable metaphor for the set of interrelated supplier re-
lations with which a rm is dealingand not just within
the automotive sector (Chopra and Meindl, 2001;
Gadde and Hakansson, 2001; Lamming et al., 2000).
The most important reason to speak of networks rather
than chains is that chains of rms working together to-
ward one particular nal product are always interwoven
with other chains for other products. This implies the
existence of networks in which a wide variety of indirect
and direct relations exist between different rms (Axels-
son and Easton, 1992; Hakansson, 1982).
The second reason is that, for different business
processes, rms may use different sets of actors to
collaborate with. In other words, rms may deploy
supply chains or networks, next to, for example, in-
novation networks and internationalization networks.
Parts of these may overlap in terms of the participat-
ing actors, whereas other parts may not (cf. Hakans-
son, Havila, and Pedersen, 1999; Tidd, 1995).
F. WYNSTRA ET AL.
Especially this latter notion is relevant for the cur-
rent study, as it suggests that the criteria for selecting,
structuring, and coordinating a set of business actors
for collaboration in manufacturing may not be the
same as for structuring a set of business actors for
collaboration in product innovation. Gadde and
Jellbo (2002) discuss the problems of systems sourc-
ing. They illustrate that the choices in partitioning and
aggregating activities for, respectively, component de-
sign and component manufacturing activities may not
always result in a systematically tiered supply base. A
supplier of complex products such as dashboards may
be an obvious rst-tier partner in terms of depth and
scope of the interface with the manufacturer regarding
information exchanges and material ows during nor-
mal production but may not have substantial devel-
opment activities as these, for instance, require
different skills (Brusoni et al., 2001). At the same
time, a particular second-tier supplier, say, of dash-
board electronics, may be a much more active partner
to the nal assembly rm during product develop-
ment. This could be due to some particular skills or
the fact that only this supplier can inuence certain
key characteristics of its (single) component that
are important to the nal customer (Lamming, 1993;
Despite the criticisms, the supply chain metaphor
stands as received wisdom, in particular for large-
scale assembly industries such as the automotive sec-
tor. As Fujimoto (2001, p. 10) states, Although the
real transaction network is far from a simple hierar-
chy, such a classication is possible according to the
main stream of transactions. Consequently, the bulk
of existing research (implicitly) argues that, given their
different roles in the supply chain, rst-, second-, and
third-and-below-tier suppliers tend to differ signi-
cantly regarding the extent of their product develop-
ment activities. The current study seeks to empirically
validate this claim and to investigate the interplay be-
tween supply chain position and other, more behav-
ioral factors in affecting the level of product
development activities.
Behavioral Factors Affecting Supplier Product
Development Activity
Obviously, several other factors have been identied,
conceptually or empirically, as affecting the level of
suppliers involvement in product development activ-
ities. One of the most intensively studied antecedent
ANTECEDENTS OF SUPPLIER PRODUCT DEVELOPMENT ACTIVITY
involves suppliers product development competen-
cies, which have been found to have a positive impact
on supplier involvement in product development
(Hartley, Zirger, and Kamath, 1997; Wasti and Liker,
1999). The extent of self-developed technological ca-
pabilities is proposed as an explanation of the tradi-
tionally high involvement of suppliers in product
development in Japan (Hines, 1994; Nishiguchi,
1994). Other antecedents include the power balance
between buyer and supplier, measured by the sup-
pliers dependence on a specic customer market
(Kamath and Liker, 1990).
The current study compares and contrasts the effect
of the suppliers structural position in the supply chain
specically with more behavioral factors. To what ex-
tent is product development activity a given, deter-
mined by a structural positionor can individual
actors pursue a certain level of activity irrespective of
their structural position? Comparing and contrasting
these effects would help to determine the respective
validity of the largely deterministic view that product
development activity is hierarchically distributed along
the supply chain, versus the more voluntaristic view
that every (supplier) rm has freedom in determining
its product development activity, depending on its spe-
cic relational context.
First of all, this study suggests investigating the be-
havior of the supplier itself, as reected by its compet-
itive strategy. Many suppliers nowadays have an
explicit strategy to become more involved in product
development. Not only does this hold for rst-tier sup-
pliers (Anderson, Oliver, and Anderson, 2001); even
suppliers at more upstream tiers also may try to differ-
entiate themselves from their competitors by means of
building product development competencies.
However, strategyor intended strategy, to be
more precise (Mintzberg, 1992)reects intended be-
havior, not actual behavior. One of the main factors
in business markets affecting the extent to which the
intended strategies of suppliers materialize into real-
ized strategy is the behavior of customers, in partic-
ular their purchasing strategies. This notion of rms
acting and reacting to each other, and thereby leading
to actual behavior that may have not been (entirely)
part of the intended strategy, is one of the key notions
in the interaction approach or industrial network
approach of the IMP Group (Axelsson and Easton,
1992; Axelsson and Wynstra, 2002; Gadde and
Hakansson, 2001). Hence, customer behavior is in-
troduced here as a third factor affecting supplier prod-
uct development activities.
J PROD INNOV MANAG 629
2010;27:625639
Conceptual Framework
The present studys conceptual framework seeks to
explain supplier product development activity in
terms of three antecedents: (1) supplier downstream
position (SDP) in the supply chain; (2) supplier inno-
vation strategy (SIS); and (3) customer development
commitment (CDC). First, a set of hypotheses is in-
troduced regarding direct effects of the antecedents,
and then some additional hypotheses regarding me-
diating and moderating effects are suggested.
Supplier Product Development Activity
Given the increasing interest in supplier involvement
in product development, various attempts have been
made to measure the nature and extent of this in-
volvement (Birou and Fawcett, 1994; Clark, 1989;
Hartley, Meredith, et al., 1997; Hartley, Zirger, et al.,
1997; Kamath and Liker, 1994; LaBahn and Krapfel,
2000; Takeishi, 2001; Twigg, 1998). Based on this lit-
erature, the present study proposes to distinguish four
dimensions of a suppliers level of activity in product
development: (1) the inuence the supplier has on the
specications of its products; (2) the quantitative
share in total product development time regarding
the suppliers set of products; (3) the phase of the
product development process the supplier is active in;
and (4) the complexity of the product development
activities. Note that, dened in this way, supplier
product development activity reects not only a sup-
pliers extent of product development collaboration
with the nal assembly rm (original equipment man-
ufacturer; OEM) but also its activity vis-a`-vis any type
of customer.
The inuence a supplier has on specications has
been dened as one of the key aspects of the extent of
supplier responsibility in product development
(Clark, 1989; Twigg, 1998). The quantitative share
in total product development time regarding the sup-
pliers set of products has been used as another, more
quantitative indicator (Von Corswant and Fredriks-
son, 2002). The phase of the product development
process the supplier is active in reects the inuence it
has on specications and the type of development ac-
tivities (e.g., conceptual design vs. detailed engineer-
ing) it may execute (Birou and Fawcett, 1994; Twigg;
Wynstra and Ten Pierick, 2000). Finally, the com-
plexity of product development activities undertaken
by a supplier in terms of the type of product involved
630 J PROD INNOV MANAG
2010;27:625639
(e.g., components vs. system) is a measure of the ma-
turity of the development tasks of the supplier (Ka-
math and Liker, 1994; Twigg).
Supplier Downstream Position
Based on the previous discussions, this studys basic
hypothesis suggests that the farther downstream to-
ward the assembly rm a supplier operates, the more
active it is in product development. Therefore, the
study rst considers at which tier in the supply chain
the supplier is operating (Figure 1). However, impor-
tant differences may exist especially within the group
of rst-tier suppliers in terms of the product they de-
liver. Specically, one important group of rst-tier
suppliers delivers complete modules to the nal as-
sembly rm (or OEM), whereas another important
group delivers very simple components, such as fas-
teners. These suppliers can be expected to have a
completely different prole regarding product devel-
opment, since a suppliers involvement in product de-
velopment partly has to do with the kind of product it
delivers to its customer. Therefore, the different types
of suppliers are ranked in the following order of op-
erating increasingly downstream: (1) raw material
(fourth-tier) suppliers; (2) third-tier or simple-compo-
nent suppliers; (3) second-tier or composite-compo-
nent suppliers; (4) direct suppliers (of, e.g., fasteners);
and (5) system or module suppliers (cf. Lamming,
1993). Thus, both direct and system suppliers are for-
mally rst-tier suppliers, but the latter is seen to be
positioned more downstream. The different supplier
positions are illustrated in Figure 2.
In addition, it is also desirable to include the pos-
sibility of lower-tier suppliers selling part of their prod-
ucts directly to OEMs. This studys operationalization
of the concept of downstream position should explicitly
include any direct sales going to the OEM, also for
second-tier and further-upstream suppliers. Thus,
H1: Supplier downstream position has a positive
effect on supplier product development activity.
1 2 3 5
Raw Simple Composite
System
material component component
supplier supplier supplier
supplier
4
Direct
supplier
Figure 2: Supply Chain Structure (Numbers indicate relative
downstream position; 1 5 most upstream; 5 5 most downstream)
F. WYNSTRA ET AL.
Supplier Innovation Strategy and Customer
Development Commitment
This studys behavioral antecedents refer to the
commitments both the supplier and its customer dem-
onstrate toward innovation and new product devel-
opment. For the supplier, this commitment can be
conceptualized in terms of its strategic emphasis on
product innovation, as reected in its focus on im-
provements in and scope of its product offerings. Such
an explicit innovation strategy is likely to get a sup-
plier more involved in product development (Ander-
son et al., 2001). Hence,
H2: Supplier innovation strategy has a positive
effect on supplier product development activity.
In the literature on purchasing and supply man-
agement, a broad distinction is made between trans-
action-oriented and relation-oriented purchasing
(Axelsson and Wynstra, 2002; Wilson, 1995). Trans-
action-oriented purchasing seeks to create competi-
tion between suppliers, which are kept at arms
length, to get the most advantageous offerings,
whereas the relation-oriented approach is more fo-
cused on creating advantageous exchanges with sup-
pliers through intensive, close collaboration with a
limited number of partners (Araujo, Dubois, and
Gadde, 1999; Dyer, 2000; Gadde and Hakansson,
2001). Regarding the automotive industry, various
studies have characterized the traditional practices
adopted by the Japanese OEMs as more relational
based and especially the U.S. practices as more trans-
actional-oriented (cf. Edwards and Samimi, 1997).
However, Dyer (1996b; 2000), among others, point
out that important differences exist among North
American OEMs as well. In the 1990s, Chrysler es-
pecially seemed to adopt a much more relational ap-
proach and beneted signicantly from this both in
terms of static efciency (e.g., product costs) and dy-
namic efciency (e.g., product development speed)
(Dyer, 2000).
An important element in the relation-oriented
approach is joint product development; customers
who have a relational-oriented approach toward their
Final suppliers are much more focused on product devel-
assembly
firm (OEM)
opment collaboration than transactional-oriented
buyers (cf. Araujo et al., 1999). One could even argue
that a collaborative approach is necessary for joint
product development to take place, since . . . the use
of collaborative arrangements allowing for mutual
access to internal processes will facilitate both the
ANTECEDENTS OF SUPPLIER PRODUCT DEVELOPMENT ACTIVITY
development and the transfer of tacit knowledge
(Sobrero and Roberts, 2002, p. 161; see also Gulati,
1998). Equally, for suppliers facing such collabora-
tive customers, it makes much more sense to engage
in joint product development activities since it is more
likely that such activities are rewarded in the future;
collaboration extends the shadow of the future
(Heide and Miner, 1992).
Within their broad supply strategy, customers have
various means to induce suppliers to carry out prod-
uct development activities. Wynstra, Weggeman, and
Van Weele (2003) refer to this as mobilization:
forcing, encouraging, or motivating suppliers to en-
gage in technology or product development activities
that are benecial to the customer. LaBahn and
Krapfel (2000) demonstrate that credible commitment
by customers has a positive effect on suppliers inten-
tion for early supplier involvement. Such commit-
ment, or promise, for instance, involves favored
access to additional business and nancial compensa-
tion for development efforts.
Apart from such rewards that are contingent on
behavior, customer development commitment may
also be reected in its general emphasis on supplier
development competencies. As discussed earlier, de-
velopment competencies have a positive impact on
supplier involvement in product development, but
only when the customer is considered likely to adhere
to supply agreements (LaBahn and Krapfel, 2000).
Thus,
H3: Customer development commitment has a positive
effect on supplier product development activity.
Supplier
Downstream
H1 : +
Position
H4: +
H2: +
Supplier Innovation
Strategy
H 5: + H3: +
Customer
Development
Commitment
Figure 3: Conceptual Modela
a
SDP, supplier downstream position. SIS, supplier innovation strategy. CDC, customer development commitment.
J PROD INNOV MANAG 631
2010;27:625639
Mediating and Moderating Effects
This studys three main hypotheses reect a direct
effects model (Figure 2, H1H3), in which all the an-
tecedents are directly related to the supplier develop-
ment activity. However, this paper argues that it is
more realistic to introduce a number of mediating and
moderating effects. Observe that this studys concep-
tualization of supplier downstream position is already
more nuanced than usual, as it also accounts for any
possible direct sales to the OEM. Nevertheless, it is
expected that adding the mediating and moderating
effects to the model will increase its t. Therefore,
four additional effects have been specied that con-
form to a series of nested models (cf. Schwab, 1999),
as illustrated in Figure 3.
First, the relationship between supplier down-
stream position and supplier product development
activity is partly mediated by supplier innovation
strategy. In other words, supplier downstream posi-
tion is expected to have not only a direct impact on
supplier product development activity but also an in-
direct impact through its impact on supplier innova-
tion strategy (which is hypothesized to have a positive
impact on supplier development activity). Also the
relationship between customer development commit-
ment and supplier product development activity may
be partly mediated by supplier innovation strategy. In
essence, according to this model, supply chain posi-
tion and customer behavior have a direct effect on
actual supplier behavior in terms of product develop-
ment and an additional indirect effect when it is in-
ternalized by means of its own strategy.
SDP * SIS
H6: +
Supplier
Product Development
Activity
H7: +
CDC * SIS
632 J PROD INNOV MANAG
2010;27:625639
The rst indirect effect (H4) follows from the ar-
gument from the dissident literature (Gadde and
Jellbo, 2002; Lamming, 1993) that supplier down-
stream position per se does not fully explain its activ-
ity in product development. According to this
hypothesis, it is only to the extent that such a posi-
tion leads to an explicit focus on innovation (the
structural position is enacted (Halinen, Salmi, and chasing management, and product development and
Havila, 1999, p. 786) that the supplier becomes active
in product development. The second indirect effect
(H5) follows from the argument that customer behav-
ior in itself does not automatically affect supplier be-
haviorthis again depends on the enactment of Swedish car and truck manufacturers, the Swedish
this behavior by the supplier. This argument is in line
with an interactive or strategizing view of strategy and other public registers. This ensured that all sig-
(Agndal, Axelsson, and Melin, 2005). Thus,
H4: Supplier downstream position has a positive
effect on supplier innovation strategy.
H5: Customer development commitment has a positive
effect on supplier innovation strategy.
Finally, two moderating effects are specied. It is
predicted that there may be positive combined effects
(on supplier product development activity) of position
and strategy, respectively, of strategy and customer
behavior. When a supplier is located close to the nal
assembly rm and has an innovation-focused strat-
egy, these factors reinforce each other in increasing
the suppliers product development activity. This is
different frombut not in conict withpositing an not. The sample of responding companies was also
indirect effect (H4), as the indirect effect states that
downstream position affects innovation strategy. The
moderating effect in itself does not assume this but
argues that, besides any direct and indirect effects,
there will be an interaction effect: the innovation
strategy will especially result in product development
activity when the supplier occupies a more down-
stream position in the supply chain. A similar argu-
ment applies for the moderating effect of customer
development commitment (H7). (For a more detailed
discussion of mediating and moderating variables, see
Baron and Kenny, 1986). In sum,
H6: Supplier downstream position has a positively
moderating effect on the relationship between sup-
plier innovation strategy and supplier product
development activity.
H7: Customer development commitment has a pos-
itively moderating effect on the relationship between
supplier innovation strategy and supplier product
development activity.
F. WYNSTRA ET AL.
Method
Sampling Design and Data Collection
This study used a eld survey to collect data. The
questionnaires pretest was conducted rst with some
10 academics in the eld of industrial networks, pur-
then with representatives from ten supplier rms. This
resulted in minor adjustments to the questionnaire.
For the nal questionnaire, respondent rms were se-
lected using the (supplier) registers of the four largest
Vehicle Component Association, Statistics Sweden,
nicant suppliers were included in the sample.
The questionnaire was sent to 594 companies. Fax
and letter reminders were sent out at several occasions,
and once a telephone follow-up was conducted. A total
of 242 companies answered the survey, resulting in a
response rate of 40.7%. Of these, 81 were component
factories owned by car or truck manufacturers or sup-
pliers of products for the aftermarket and were therefore
not included in the analyses presented herein, resulting
in a sample of 161 companies (production suppliers to
car and truck manufacturers). Among the companies
that declined to respond to the questionnaire, a group of
20 companies were selected to assess nonresponse bias.
No evidence was found indicating structural differences
between companies that did respond and those who did
compared with the total population regarding the rep-
resentation of companies in each part of the value chain,
which yielded no signicant differences.
The questionnaire, in Swedish, was sent to either the
general manager or the plant manager. In some cases,
it was then delegated to other senior managers. No
signicant differences are expected between the differ-
ent types of respondents. Given the nature of the ques-
tions, the respondents are viewed as informants on the
situation at their respective rmsthe questions are
not focused on individual experiences or perceptions.
Of the 161 respondents, 23 rms could be classied as
third-tier suppliers, 69 as second-tier, 58 as direct sup-
pliers, and 11 as system suppliers. There were no
fourth-tier or raw material suppliers in the sample.
Measurement Instruments
Supplier product development activity was operation-
alized using four items based on a combination of
ANTECEDENTS OF SUPPLIER PRODUCT DEVELOPMENT ACTIVITY
previous studies, as discussed earlier (Birou and
Fawcett, 1994; Clark, 1989; Kamath and Liker,
1994; Twigg, 1998; Von Corswant and Fredriksson,
2002; Wynstra and Ten Pierick, 2000).
Supplier downstream position was operationalized
by two items, following Lamming (1993): one mea-
suring the extent of downstream supplier position in
the supply chain, and the other measuring the sup-
pliers share of sales going directly to the OEM (nal
assembly rm). For the rst item, respondents were
actually asked to select from a graphical representa-
tion of a supply chain the one position that best
matched their rms position (Figure 2).
Supplier innovation strategy was operationalized
by four items, all dealing with the strategic focus of
the rm: (1) on product performance; (2) on a broad
product offering; (3) on customization of products;
and (4) on product changes and improvements. These
items effectively reect a rms focus on product in-
novation and product improvement, two main areas
of product development. Finally, customer develop-
ment commitment was operationalized using two
items, similar to the ones used by LaBahn and Krapfel
(2000) and Wasti and Liker (1999). The items (trans-
lated from the Swedish original) are summarized in
Table 1.
Data Analysis
The partial least squares (PLS) approach to path
modeling was used to estimate both the measurement
and structural parameters in the structural equation
model (SEM; Chin, 1998; Falk and Miller, 1992; For-
nell and Bookstein, 1982; Hulland, 1999; Lohmoller,
1989; Wold, 1985). PLS was used as implemented in
PLS-Graph Version 3.0 (Chin, 2001). PLS estimation
uses an iterative estimation algorithm, which consists
of a series of simple or multiple ordinary least squares
regression analyses (Chin, 1998). As opposed to the
covariance- or factor-based approach to structural
equation modeling implemented, for example, in
LISREL, PLS estimation is component based. As a
consequence, PLS does not require multivariate nor-
mal data, places minimum requirements on measure-
ment levels, and is more suitable for small samples
(Chin, 1998; Falk and Miller; Wold). Moreover, PLS
is considered more appropriate for models containing
complex relationships, such as this studys conceptual
model (Figure 2). Finally, PLS can more easily ac-
commodate the use of formative indicators compared
J PROD INNOV MANAG 633
2010;27:625639
Table 1: Measurement Instruments
Supplier Downstream Position (SDP)
SDP1 Which position best describes your rms position in the
supply chain?a
SDP2 Share of sales directly to automotive nal assembly rm
(%)
Supplier Innovation Strategy (SIS)
SIS1 Focus on product performanceb
SIS2 Focus on broad product offeringb
SIS3 Focus on customization of productsb
SIS4 Focus on product changes and improvementsb
Customer Development Commitment (CDC)
CDC1 Our customers value product development
competencies in their suppliersc
CDC2 Our customers pay (in the unit-price or directly) for the
product development costs our rm incursc
Supplier Product Development Activity (SPDA)
SPDA1 Extent to which supplier manufactures products on
customer specicationd
SPDA2 Product development phases in which the supplier
actively participates (R)e
SPDA3 Share in total development time of the products the
supplier manufactures and delivers (%)
SPDA4 Complexity of product development activitiesf
a
1: Raw material supplier, 2: Simple component supplier, 3: Compo-
nent supplier, 4: Direct supplier, 5: System supplier.
b
Item measured on ve-point scale: 1 5 no focus, 5 5 strong focus.
c
Item measured on ve-point scale: 1 5 fully disagree, 5 5 fully agree.
d
Item measured on 5-point scale: 1 5 developed totally on customer
specications, 5 5 developed totally on own initiative.
e
1: Basic research, 2: Advanced development, 3: Concept phase, 4:
Engineering phase, 5: Product modications.
f
1: Small changes in existing product, 2: Redesigns of existing compo-
nents/sub-assemblies, 3: Development of completely new components/
subassemblies, 4:: Redesigns of existing systems, 5: Development of
completely new systems.
 Item was dropped after construct validation. (R): Item was reverse-
scaled.
with covariance-based SEM (Chin, 1998; Hulland;
Jarvis, Mackenzie, and Podsakoff, 2003; MacCallum
and Browne, 1993). Reective indicators in this study
were specied for all the constructs except for supplier
downstream position, which consists of formative in-
dicators given the nature of the construct (Falk and
Miller; Hulland; Jarvis et al; MacCallum and
Browne).
Findings
The nal model is essentially composed of three
nested models (Baron and Kenny, 1986; Schwab,
1999). In the rst model, the relationships among
SDP, CDC, and SPDA are fully mediated by supplier
innovation strategy (SIS). Next, the direct effects of
SDP and CDC on SPDA were included, in which
SIS serves as a partial mediator for SDP and CDC.
634 J PROD INNOV MANAG F. WYNSTRA ET AL.
2010;27:625639

Finally, two moderating effectsSIS  SDP and Table 2: Means, Standard Deviations, Composite Reli-
SIS  CDCwere introduced (Figure 3). ability, and Intercorrelationsa
To assure that the sample size was adequate for the Itemsb Constructsc
analysis, a power analysis was conducted, as proposed
by Cohen (1988) for the F-test, pertaining to R2 for M SD Loading CR 1. 2. 3. 4.
the endogenous constructs. Assuming a medium effect 1. SDP d
SDP1 n.a. n.a. n.a. n.a. n.a
size (f2 5 0.15; R2 5 0.13) for ve predictors (i.e., in- SDP2 26.28 30.27 n.a.
cluding all effects in the conceptual model), a signi- 2. SIS SIS2 3.01 1.12 0.83 0.78 0.13 0.75
SIS3 4.14 0.97 0.80
cance level (a) of 0.05, and a desired power (1 b) of SIS4 3.79 0.92 0.58
0.80, the analysis would require a sample size of 91. 3. CDC CDC1 4.22 0.83 0.81 0.79 0.26 0.41 0.81
Using Greens (1991) approach would yield a required CDC2 3.08 1.13 0.80
4. SPDA SPDA1 2.19 1.43 0.84 0.80 0.40 0.43 0.23 0.81
sample size of 89. Both bounds are well exceeded by
SPDA2 1.75 1.19 0.75
this studys actual sample size (161). SPDA3 35.60 38.02 0.81
SPDA4 2.36 1.39 0.84
a
SDS, supplier downstream position. SIS, supplier innovation strat-
egy. CDC, customer development commitment. SPDA, supplier prod-
Construct Validation uct development activity.
b
M, Mean. SD, standard deviation. Loading, standardized loading.
Before testing the substantive hypotheses in this study, CR, composite reliability.
c
Square root of average variance extracted on diagonal.
the validity of the measurement model was evaluated d
Construct is dened by formative indicators; therefore, psychometric
by examining the reliability, convergent validity, and properties as dened for reective indicators are not relevant (Jarvis,
discriminant validity for the measurements pertaining MacKenzie, and Podsakoff, 2003).

to the reective constructs used in the study. Reliability

was assessed using composite scale reliability (Chin,
1998; Fornell and Larcker, 1981; Hulland, 1999; Ten-
enhaus et al., 2005; Werts, Linn, and Joreskog, 1974),
and average variance was extracted for the constructs
employed in the study (Chin; Fornell and Larcker;
Hulland; Tenenhaus et al.). Composite scale reliability
ranged between 0.78 and 0.80, exceeding the cut-off
value of 0.7 suggested by Nunnally and Bernstein
(1994). Average variance extracted ranged between
0.56 and 0.66, exceeding the 0.5 cut-off value proposed
by Fornell and Larcker (Table 2).
Convergent validity can be evaluated by inspecting
the factor loadings of the measures on their respective
constructs (Hulland, 1999; Tenenhaus et al., 2005).
Discriminant validity can be assessed by examining
the cross-factor loadings of the measures (Chin, 1998;
Howell and Aviolo, 1993; Hulland, 1999). The mea-
sures should not exhibit any loadings substantial in
magnitude on constructs for which this study has not
hypothesized so. Moreover, the correlations of resid-
ual terms (Y) across blocks should not exceed 0.2 in
absolute terms (Falk and Miller, 1992; Fornell and
Bookstein, 1982). Additionally, a construct should
share more variance with its measures than it shares
with other constructs in the model (Chin; Howell and
Aviolo; Hulland). Consequently, the square root of
the average variance extracted should exceed the in-
tercorrelations of the construct with other constructs
in the model.
After inspection of the factor loadings one item
(SIS1) was omitted from the analysis as it exhibited a
standardized loading less than 0.5 in magnitude. In-
spection of the cross-loadings showed no loading sub-
stantial in magnitude. The intercorrelations of the
residual terms (Y) showed no values exceeding 0.2 in
absolute terms. Table 2 reveals that the square root of
average variance extracted exceeded the intercorrela-
tions of the construct with the other constructs in the
model.
Hypotheses Testing
For the structural model, the R2 value for the endog-
enous latent variables was used as a measure of model
t (Chin, 1998; Tenenhaus et al., 2005). Recently,
Tenenhaus et al. developed a global t measure for
PLS: goodness-of-t (GOF). This measure is dened
as the geometric mean of average communality and
average R2 (0  GOF1). However, since this study
employs formative indicators, GOF would not be an
adequate t measure. A medium effect size of R2 was
found for SIS (R2 5 0.17), and a large effect size was
found for SPDA (R2 5 0.33). To test the effects and
the statistical signicance of the parameters in the
structural model, a bootstrapping procedure with 250
and 500 resamples was used (Chin, 1998, 2001; Efron
and Tibshirani, 1993). The resulting t-statistics for
ANTECEDENTS OF SUPPLIER PRODUCT DEVELOPMENT ACTIVITY
Supplier
Downstream
Position
0.32**
n.s.
R2=0.17**
0.45**
Supplier Innovation
Product Development
Strategy
0.40** n.s.
Customer
Development
Commitment
Figure 4: Testing Hypothesesa
a
SDP, supplier downstream position. SIS, supplier innovation strategy. CDC, customer development commitment.
po.05.
po.01.
both the 250 and 500 resamples reveal a consistent
pattern using the individual sign changes option in
PLS-Graph Version 3.0 (Chin, 2001). The results of
the present analysis, which provide support for four of
seven hypothesized relations, are depicted in Figure 4.
Using an overall signicance level (a) of 0.05, a
signicant, positive effect of customer development
commitment (b 5 0.40; po.01) on supplier innovation
strategy (R2 5 0.17) was found, thus supporting H5.
We nd no signicant effect of supplier downstream
position on supplier innovation strategy (H4). More-
over, a signicant effect of supplier innovation strat-
egy on supplier product development activity
(b 5 0.40; po.01) was found, supporting H2. These
results suggest that the indirect effect of customer de-
velopment commitment on supplier product develop-
ment activity is signicant (Baron and Kenny, 1986;
Sobel, 1982; bindirect 5 0.17, z 5 3.57, po.01), whereas
the indirect effect of supplier downstream position is
not signicant (bindirect 5 0.02, z 5 0.55, n.s.).
By adding the direct effects of supplier downstream
position and customer development commitment, a
partially mediating model is obtained. Supplier inno-
vation strategy constitutes the partial mediator in the
model. These results indicate that adding the direct
effects signicantly improved the variance explained of
supplier product development activity in terms of R2
(R2 5 0.29 [DR2 5 0.12; f2 5 0.14], F(2,157) 5 13.03,
po.01). Supplier downstream position has a signi-
cant effect on supplier product development activity
(b 5 0.32; po.01), whereas the direct effect of cus-
tomer development on supplier product development
J PROD INNOV MANAG 635
2010;27:625639
SDP * SIS
R2=0.33**
0.18**
Supplier
Activity
n.s.
CDC * SIS
activity is found not to be signicant. Hence, H1 is
supported, and H3 is not supported by the data.
Finally, two product terms (SIS  SDP and
SIS  CDC) were introduced to test for the moderat-
ing effects of supplier downstream position and cus-
tomer development commitment. This results indicate
that this signicantly improves the explained variance
in supplier product development activity (R2 5 0.33
[DR2 5 0.04; ; f2 5 0.06], F(2,155) 5 4.50, p 5 .01).
PLS allows us to employ a product indicator ap-
proach while simultaneously accounting for measure-
ment error (Chin, Marcolin, and Newsted, 2003). For
the moderator analysis, the indicators are standard-
ized and subsequently the indicators of the product
terms for SIS  CDC are obtained by creating all pos-
sible products from the two sets of indicators (Chin
et al., 2003). However, since a formative measurement
model was used for supplier downstream position, the
latent variable sores for SDP and SIS were derived,
and the product term was calculated on the basis of
the latent variable scores (cf. Chin et al., 2003). These
results suggest a positive and signicant moderating
effect for supplier downstream position (b 5 0.18;
po.01). The moderating effect of customer develop-
ment commitment was not signicant. Hence, the
data support H6 but not H7.
Discussion
First of all, this studys results demonstrate that sup-
plier product development activity is directly affected
636 J PROD INNOV MANAG
2010;27:625639
by the suppliers position in the supply chain and by
an explicit strategic focus on innovation. These nd-
ings provide support for the conventional notion that
rst-tier suppliers are more active in product devel-
opment for their customers compared with suppliers
on lower tier levels. However, the magnitude of this
effect is smaller than the effect of strategic focus on
product innovation.
More detailed insights can be learned from inspect-
ing the mediating and moderating effects. Notably,
there is no signicant effect of supplier position on in-
novation strategy, but there are signicant interaction
effects between its position and innovation strategy,
implying that the effects of strategy on actual develop-
ment activity are contingent on the suppliers supply
chain position. Apparently, the degree to which a sup-
plier is located downstream does not affect the likeli-
hood of adopting an innovation strategy, but it does
affect the extent to which such a strategy ultimately
results in actual product development activities.
The commitment of customers to support such de-
velopment activities, on the other hand, has no direct
positive impact on supplier product development, but
the effect appears to be fully mediated by the sup-
pliers strategy without any further interaction effects.
A supplier strategy focusing on innovation is posi-
tively affected by the commitment of customers, but
commitment in itself has no signicant direct impact
on supplier product development activity and does
not leverage the strategyactivity relationship.
Some interesting observations can be made on the
basis of these results. First, while the position of the
supplier in the supply chain does have a direct impact on
the extent of its product development activity, it does
not fully constrain it. Any supplier, wherever in the
supply chain, that demonstrates an explicit strategy fo-
cused on innovation is more likely to become involved
in product development activities for its customers. In
fact, the effect of supplier innovation strategy is stronger
than that of supplier downstream position. So, suppliers
are not really in chains. Still, the likelihood of actually
performing product development activities increases for
innovative suppliers that are located downstream.
These ndings may serve to further clarify the de-
bate on the nature and extent of the impact of supply
chain position on product development activities of
suppliers, in a subtle way. Both position and strategy
matter as well as the t between the twoalthough
suppliers may not consciously take this into account
when devising their strategy (given the lack of effects
of position on strategy).
F. WYNSTRA ET AL.
Second, the purchasing behavior of customers, es-
pecially in terms of encouraging and rewarding prod-
uct development activities of suppliers, has no impact
on these activities unless they are enacted in the
strategy of the supplier. This provides an interesting
connection between two strands of literature that, on
one hand, emphasize the role of customer behavior
and commitment and, on the other hand, focus on the
role of supplier strategy and capabilities. It also em-
phasizes the phenomenon of interaction in business
markets; actual rm behavior in business-to-business
setting is an outcome of a subtle interplay of actions
and reactions by customers and suppliers (Agndal
et al., 2005; Ford et al., 1998).
Conclusion
The present study developed and tested a conceptual
framework in which supplier downstream position in
the supply chain, supplier innovation strategy, and cus-
tomer development commitment are seen as the ante-
cedents of supplier product development activity.
Testing a series of nested models, signicant support
was found for the hypothesis that the position of the
supplier in the supply chain has a direct impact on (ac-
tual) supplier product development activity. A suppliers
strategic focus on innovation, however, has a stronger
impact on its product development activity than its sup-
ply chain position. At the same time, these ndings re-
veal an interaction effect between the two antecedents:
the more downstream a supplier is located, the stronger
the impact of strategy on product development activity.
The conclusion is that the supply chain logic holds
only to a limited extent for the distribution and coor-
dination of product development activities and that the
particular strategy of the individual supplier plays a
very important role. This point is reinforced by the
nding that customer development commitment does
not have any signicant direct effect on supplier prod-
uct development activities; this relation is fully medi-
ated by supplier innovation strategy. This suggests that
customers cannot easily inuence suppliers in terms of
the extent of their product development activities, with
the possible implicit or explicit motive to align co-
development partners along a supply chain structure.
These ndings challenge the overly hierarchical
view of supply chains consisting of different tiers of
suppliers, each with its typical set of activities and re-
sponsibilities, and are more supportive of the network
approach to studying supplier relations. Second-and-
ANTECEDENTS OF SUPPLIER PRODUCT DEVELOPMENT ACTIVITY
lower-tier suppliers may still be quite active in product
development. Overlooking this fact may lead to
downplaying the role and contribution of lower-tier
suppliers in product development processes in the
supply chain. Compared with manufacturing activi-
ties, product development activities require different
resources and competencies and thus different sets of
roles and responsibilities and possibly even different
collaboration partners. Further research, for example
on the challenges of matching system sourcing strat-
egies during both product and process development
and normal production, should increase our under-
standing of the various trade-offs involved.
Obviously, the factors included in this analysis can
only partly explain the variation in suppliers product
development activity. Differences in internal resource
endowments (e.g., skills and capabilities, laboratories)
could provide additional explanations. Also, relations
with other customers outside the automotive industry
could have an impact on product development activ-
ities. This study should nevertheless provide some
interesting contributions to the discussion on alloca-
tion and coordination of product development activ-
ities in interorganizational networks.
Managerial Implications
This study has not explicitly considered the effects of
supplier product development activity on supplier
performance. The sparse studies available have found
a positive effect of (extensive) supplier involvement in
manufacturers new product development on suppli-
ers innovation and nancial performance (Chung
and Kim, 2003). The present study complements these
studies in that the results suggest that the likelihood of
implementing this involvement, and thus increasing
performance, depends on the combination of position
and strategy. However, most supplier managers ap-
parently fail to acknowledge that an innovation strat-
egy is likely to result in more development activity or
involvement when the supplier is located more down-
stream in the supply chain; there is no direct effect of
position on innovation strategy. Thus, one important
managerial implication from the present study is that
in adopting a product innovation strategy (at least
automotive) suppliers should pay more attention to
their supply chain position than they do now.
Still, the ndings suggest that suppliers located
more upstream in the supply chain but with a strate-
gic focus on innovation would also have ample op-
J PROD INNOV MANAG 637
2010;27:625639
portunities to establish a strong presence in product
development activities with and for their customers,
but it would require more effort.
The mediating role of supplier innovation strategy
in linking customer development commitment to
product development activity holds implications for
the approach customers should take in promoting
suppliers product development activities. Unless such
commitment is anchored in an explicit innovation
strategy of the supplier, there will not be a signicant
increase in product development activity. This implies
that customers wanting suppliers to become active in
product development should select suppliers with an
innovation-oriented strategy and try to affect the stra-
tegic agenda of the suppliers, rather than on a project-
by-project basis try to mobilize suppliers in this re-
spect (Wynstra et al., 2003).
Limitations and Future Research
Concerning the shortcomings of this study, it must be
acknowledged that the study was carried out in a sin-
gle country and sector, which possibly limits the ex-
ternal validity. Replication studies could investigate
the role of strategy, supply chain position, and cus-
tomer commitment in other industries and countries.
Longitudinal studies might help to further verify the
causality of the relationships in this studys model.
In addition, future research could be conducted in
several directions. First of all, it would be interesting
to investigate the antecedents of supplier innovation
strategy, building on earlier work of Wasti and Liker
(1997, 1999) and others. For example, what (internal)
resource endowments or organizational characteris-
tics would support such a strategy? Second, further
research could build on this and previous studies to
investigate more closely under which conditions in-
volvement in customers new product development
activities actually benets suppliers nancial perfor-
mance. A third avenue for further research could fo-
cus on the underlying characteristics of customers that
show high commitment toward supplier product de-
velopment and the conditions that make such com-
mitment most effective. What are the effects, for
instance, of company size and market segment?
It is hoped that this research, as one of the rst large-
scale empirical studies into the relative impact of supply
chain position on supplier product development activ-
ity, provides useful inspiration and guidance for further
(empirical) research along these and other directions.
638 J PROD INNOV MANAG
2010;27:625639
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