Performance effects of partnership between manufacturers and suppliers for new product development: the supplier’s standpoint

Abstract

This study analyzes the effects of supplier involvement in a manufacturer’s new product development on the supplier’s financial performance, innovation, and product quality with data from 128 suppliers in the Korean automobile and electronics industries. The results indicate that a higher level of supplier’s involvement positively influences innovation and financial performance. The results generally indicate that a higher level of supplier involvement, especially in the form of involvement in the design stage significantly increases suppliers’ innovation and cash-flow rate. However, the positive effect of supplier involvement on quality was observed only in the electronics industry.