Assessing inter-organizational innovation performance through relational governance and dynamic capabilities in supply chains

Purpose – This paper aims to examine the factors influencing innovation performance and implementation in inter-organizational relationships. Design/methodology/approach – A novel research model comprises five research hypotheses with four constructs, including information technology infrastructure flexibility, institutional orientation, dynamic capabilities and innovation performance. The hypotheses are tested on data collected from 260 of the top 1,000 Taiwanese manufacturing firms in 2011 listed by Business Weekly in Taiwan, using structural equation modeling. Findings – The study provides insight into how supply chain members should reinforce their dynamic capabilities and relational and institutional view of relational governance so as to improve their value-based relationships and in turn enhance innovation performance. Research limitations/implications – The empirical study is conducted on supply chains, with data collected from Taiwan's manufacturing firms. With the research model developed, cross-industrial studies can be conducted to investigate whether differences exist in relation to the inter-relationship effects that affect inter-organizational innovation performance. Practical implications – The study provides useful insights into how supply chain members should reinforce their value-based relationships by focusing on activities that would enhance information technology infrastructure flexibility and institutional orientation, and improve activities that would reinforce the activities of dynamic capabilities, in order to achieve the competitive advantage of inter-organizational innovation performance. Originality/value – The novel research model developed may serve as a starting point for future theoretical and empirical research and measures for describing and modeling the role of value-based relationships from the relational and institutional view of relational governance and dynamic capabilities, which is not dealt with in previous studies.