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.