Supplier and customer involvement on new product performance : Contextual factors and an empirical test from manufacturer perspective

Purpose – Recent studies have found inconsistent findings on the impact of supplier and customer involvement on new product development. This study thus aims to explore what contextual factors affect supplier and customer involvement altogether and how such involvement affects new product performance. Design/methodology/approach – The study used structural equation modelling to analyze empirical survey data from 251 manufacturers in Hong Kong. Findings – The study found that modular design, product innovation, and internal coordination are positively correlated with the supplier and customer involvement. Such involvement and product innovation lead to better new product performance. Research limitations/implications – The study is limited to the use of cross‐sectional data and a single key informant approach, and the industry structure of the sampled industries. Practical implications – The study examines the contextual factors of supplier and customer involvement and how such involvement relates to new product development with new empirical evidence. The study not only provides new empirical evidence to support the importance of supply chain management in product development, but also extends existing literature to identify new contextual factors for such involvement. Originality/value – The study re‐examines generalized beliefs about supplier and customer involvement in new product development, and extends prior studies of the contextual dimensions of product modularity, product innovativeness, and internal coordination on such involvement in an empirical way.