Is supplier involvement always beneficial for financial performance? The roles of ambidextrous innovations and product smartness

Purpose: The purpose of this paper is to investigate the performance impact of supplier involvement, based on the knowing processes and contingencies of knowledge-based view. Ambidextrous innovations (i.e. exploitative innovation and exploratory innovation) are taken as intermediary processes. Furthermore, product smartness is considered to clarify boundary conditions. Design/methodology/approach: The ordinary least squares regression was conducted, based on the two-source data collected from 125 high-tech firms in China. Findings: Ambidextrous innovations positively mediate the relationship between supplier involvement and financial performance. Product smartness weakens the indirect impact via exploratory innovation but not exploitative innovation. Originality/value: This study reveals the knowledge application and recombination mechanisms of ambidextrous innovations to mediate between supplier involvement and financial performance. It also highlights digital encapsulation function of product smartness as a contingent factor.