Skip to main content
  • Research Article
  • Published:

Does inter-firm learning and trust promote firm innovativeness?

Abstract

This paper elaborates on a theoretical framework that assesses the effects of inter-firm trust and learning on firm’s subsequent innovation output. We argue that joint problem solving arrangements play an intermediate role in firm innovativeness by promoting the sharing of complex and difficult-to-codify knowledge and information. Using survey data from a sample of 194 firms from the mainland of China, we find that inter-firm trust and learning have positive impacts on both buyer innovativeness and seller innovativeness. It is also found that there is a positive interactive relationship between trust and learning. Furthermore, their inter-effect and complementarity facilitate innovativeness by promoting joint problem solving at the firm level. Based on these findings, theoretical and managerial implications are discussed.

References

  • Ahuja G (2000). Collaboration networks, structural holes, and innovation: A longitudinal study. Administrative Science Quarterly, 45(3): 425–455

    Article  Google Scholar 

  • Bell G G (2005). Clusters, networks and firm innovativeness. Strategic Management Journal, 26(3): 287–295

    Article  Google Scholar 

  • Bowman C, Ambrosini V (2000). Value creation versus value capture: Towards a coherent definition of value in strategy. British Journal of Management, 11(1): 1–15

    Article  Google Scholar 

  • Carr A S, Pearson J N (1999). Strategically manage buyer-supplier relationship and performance outcome. Journal of Operations Management, 17(5): 497–519

    Article  Google Scholar 

  • Carter J R, Miller J G (1989). The impact of alternative vendor/buyer communication structures on the quality of purchased materials. Decision Sciences, 20(4): 759–77

    Article  Google Scholar 

  • Child J, Faulkner D (1998). Strategies of Cooperation: Managing Alliances, Networks, and Joint Ventures. New York: Oxford University Press

    Google Scholar 

  • Claro D P, Hagelaar G, Omta O (2003). The determinants of relational governance and performance: How to manage business relationships? Industrial Marketing Management, 32(8): 703–716

    Article  Google Scholar 

  • Das T K, Teng B S (1998). Between trust and control: Developing confidence in partner cooperation in alliances. Academy of Management Review, 23: 491–512

    Article  Google Scholar 

  • Doney P M, Cannon J P (1997). An examination of the nature of trust in buyer-seller relationships. Journal of Marketing, 61(2): 35–51

    Article  Google Scholar 

  • Dore R (1983). Goodwill and the spirit of market capitalism. British Journal of Sociology, 34(4): 459–482

    Article  Google Scholar 

  • Dougherty D (1992). Interpretive barriers to successful product innovation in large firms. Organization Science, 3(2): 179–202

    Article  Google Scholar 

  • Dyer J H, Singh H (1998). The relational view: Cooperative strategy and sources of inter-organizational competitive advantage. Academy of Management Review, 23(4): 660–679

    Article  Google Scholar 

  • Ganesan S (1994). Determinants of long-term orientation in buyer-seller relationships. Journal of Marketing, 58(2): 1–19

    Article  Google Scholar 

  • Ghosh M, John G (1999). Strategic fit in industrial alliances: an empirical test of governance value analysis. Journal of Marketing Research, 42(3): 346–357

    Article  Google Scholar 

  • Granovetter M (1985). Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91(3): 481–510

    Article  Google Scholar 

  • Gulati R (1999). Network location and learning: The influence of network resources and firm capabilities on alliance formation. Strategic Management Journal, 20(5): 397–420

    Article  Google Scholar 

  • Hair J F, Anderson R E, Tatham R L, Black W C (1998). Multivariate Data Analysis with Readings. Englewood Cliffs, NJ: Prentice Hall

    Google Scholar 

  • Hallikas J, Puumalainen K, Vesterinen T, Virolainen V (2005). Risk-based classification of supplier relationships. Journal of Purchasing and Supply Management, 11(2/3): 72–82

    Article  Google Scholar 

  • Hansen M (1999). The search-transfer problem: The role of weak ties in sharing knowledge across organizational subunits. Administrative Science Quarterly, 44: 83–111

    Article  Google Scholar 

  • Heide J B, Miner A S (1992). The shadow of the future: Effects of anticipated and frequency of contract on buyer-seller cooperation. Academy of Management Journal, 35(2): 265–291

    Article  Google Scholar 

  • Henderson R, Clark K (1990). Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms. Administrative Science Quarterly, 35(1): 9–30

    Article  Google Scholar 

  • Inkpen A C, Wang Q (2006). An examination of collaboration and knowledge transfer: China-Singapore Suzhou industrial park. Journal of Management Studies, 43(4): 779–810

    Article  Google Scholar 

  • Jarilli C J (1988). On strategic networks. Strategic Management Journal, 9(1): 31–41

    Article  Google Scholar 

  • Kale P, Singh H, Perlmutter H (2000). Learning and protection of proprietary assets in strategic alliances: Building relational capital. Strategic Management Journal, 21(3): 217–237

    Article  Google Scholar 

  • Kogut B, Zander U (1992). Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science, 3: 383–397

    Article  Google Scholar 

  • Kotabe M, Martin X, Domoto H (2003). Gaining from vertical partnerships: Knowledge transfer, relationship duration, and supplier performance improvement in the U.S. and Japanese automotive industries. Strategic Management Journal, 24: 293–316

    Article  Google Scholar 

  • Lamming R C (1993). Beyond partnership: Strategies for innovation and lean supply. Hemel Hempstead: Prentice Hall

    Google Scholar 

  • Lance C (1988). Residual centering, exploratory and confirmatory moderator analysis, and decomposition of effects in path models containing interactions. Applied Psychological Measurement, 12(2): 163–175

    Article  Google Scholar 

  • Lorenzoni G, Lipparini A (1999). The leveraging of inter-firm relationships as a distinctive organizational capability: A longitudinal study. Strategic Management Journal, 20(4): 317–338

    Article  Google Scholar 

  • Lusch R F, Brown J R (1996). Interdependency, contracting, and relational behavior in market channels. Journal of Marketing, 60: 19–38

    Article  Google Scholar 

  • MacKinnon J G (2002). Bootstrap inference in econometrics. Canadian Journal of Economics, 35: 615–645

    Article  Google Scholar 

  • Marshall C (2004). The dynamic nature of innovation partnering: A longitudinal study of collaborative inter-organization relationship. European Journal of Innovation Management, 7(2): 128–140

    Article  Google Scholar 

  • Mayer R C, Davis J H, Schoorman F D (1995). An integration model of organizational trust. Academy of Management Review, 20(3): 709–734.

    Article  Google Scholar 

  • McEvily B, Marcus A (2005). Embedded ties and the acquisition of competitive capabilities. Strategic Management Journal, 26: 1033–1055

    Article  Google Scholar 

  • Milgrom P, Roberts J (1995). Complementarities and fit: Strategy, structure, and organizational change in manufacturing. Journal of Accounting and Economics, 19(2/3): 179–208.

    Article  Google Scholar 

  • Mohr J, Nevin J R (1990). Communication strategies in marketing channels: A theoretical perspective. Journal of Marketing, 54(4): 36–51

    Article  Google Scholar 

  • Mohr J, Spekman R (1994). Characteristics of partnership success: Partnership attributes, communication behavior, and conflict resolution techniques. Strategic Management Journal, 15: 135–152

    Article  Google Scholar 

  • Molm L, Peterson G, Takashaki N (1999). Power in negotiated and reciprocal exchange. American Sociological Review, 64(6): 876–890

    Article  Google Scholar 

  • Mowery D, Oxley J E, Silverman B S (1996). Strategic alliances and inter-firm knowledge transfer. Strategic Management Journal, 17: 77–91

    Google Scholar 

  • Nickerson J A, Zenger T R (2004). A knowledge-based theory of the firm—the problem-solving perspective. Organization Science, 15(6): 617–632

    Article  Google Scholar 

  • Obstfeld D (2005). Social networks, the tertius lungens orientation, and involvement in innovation. Administrative Science Quarterly, 50(1): 100–130

    Google Scholar 

  • Ouchi W G (1979). A conceptual framework for the design of organizational control mechanisms. Management Science, 25: 833–848

    Article  Google Scholar 

  • Paulraj A, Lado A A, Chen I J (2008). Inter-organizational communication as a relational competency: Antecedents and performance outcomes in collaborative buyer-supplier relationships. Journal of Operations Management, 26: 45–64

    Article  Google Scholar 

  • Podolny J M, Stuart T E (1995). A role-based ecology of technological change. American Journal of Sociology, 100(5): 1224–1260

    Article  Google Scholar 

  • Podsakoff P, Organ D (1986). Self-reports in organizational research: Problems and prospects. Journal of Management, 12(12): 531–544

    Article  Google Scholar 

  • Powell W W, Koput K W, Smith-Doerr L (1996). Inter-organizational collaboration and the locus of innovation: Networks of learning in biotechnology. Administrative Science Quarterly, 41: 116–145

    Article  Google Scholar 

  • Prahalad C K, Hamel G (1990). The core competence of the corporation. Harvard Business Review, 68(3): 79–91

    Google Scholar 

  • Ragatz G L, Handfield R B, Scannel T V (1997). Success factors for integrating suppliers into new product development. Journal of Product Innovation Management, 14: 190–202

    Article  Google Scholar 

  • Shane S, Cable D (2002). Network ties, reputation, and the financing of new ventures. Management Science, 48(3): 364–381

    Article  Google Scholar 

  • Stuart T (1998). Network positions and propensities to collaborate: An investigation of strategic alliance formation in a high-technology industry. Administrative Science Quarterly, 43(3): 668–698

    Article  Google Scholar 

  • Szulanski G (1996). Exploring internal stickiness: Impediments to the transfer of best practice within the firm. Strategic Management Journal, 17: 27–43

    Google Scholar 

  • Teece D J (1989). Inter-organizational requirements of the innovation process. Managerial and Decision Economics, 10: 35–42

    Google Scholar 

  • Tiwana A (2008). Do bridging ties complement strong ties? An empirical examination of alliance ambedexiterity. Strategic Management Journal, 29: 251–272

    Article  Google Scholar 

  • Uzzi B (1997). Social structure and competition in interfirm networks. Administrative Science Quarterly, 42: 35–67

    Article  Google Scholar 

  • Zander U, Kogut B (1995). Knowledge and the speed of transfer and imitation of organizational capabilities. Organization Science, 6(1): 76–92

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Hua Song.

Additional information

__________

Translated from Kexuexue yu Kexue Jishu Guanli 科学学与科学技术管理 (Science of Science and Management of S.&T.), 2009, (4): 159–166

Rights and permissions

Reprints and permissions

About this article

Cite this article

Song, H., Wang, L. Does inter-firm learning and trust promote firm innovativeness?. Front. Bus. Res. China 4, 262–282 (2010). https://doi.org/10.1007/s11782-010-0012-4

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11782-010-0012-4

Keywords