The correlations among domain knowledge specificity, joint new product development and relationship performance

Purpose – This paper aims to provide suppliers with an important direction in customer relationship management to apply organizational resources to understanding patterns and rules particular to a specific context, since the expertise deployment leads to increasingly effective issue diagnosis and problem solving. And to provide suppliers with an important government mechanism that co‐development with buyers not only reduces transaction cost, but also enhances performance. Design/methodology/approach – The conceptual model is empirically tested using cross‐sectional survey data, based on the administering of mail questionnaires to key informants within a sample of 133 Taiwanese contract manufacturers of information products. A preliminary examination of the validity of these measures is conducted with a view to examining the item‐to‐item correlations for the set of items corresponding to each of the theoretical constructs. The hypotheses were tested by ordinary least‐square regression analysis. Findings – It is found that the joint new product development (JNPD) activities are positively related to the supplier's relationship performance (RP). Moreover, the supplier's domain knowledge specificity (DKS) positively influences the degree of JNPD and RP. Besides, it is also found that the effect of DKS on RP is partially mediated by JNPD. Research limitations/implications – This research collected data from only one partner to deal with supplier‐buyer dyads. The causal arguments are made in this research and yet offer only a cross‐sectional test for these arguments. This study focused on limited variables only. Practical implications – It is essential for suppliers to apply organizational resources to understanding patterns and rules particular to a specific context, since the expertise deployment leads to increasingly effective issue diagnosis and problem solving. Suppliers may conduct co‐development with buyers not only to reduce transaction cost, but also to enhance performance. Originality/value – This paper fulfils an identified information/resources need and offers practical help to suppliers implementing governance strategy.