Examining the Roles of Buyer Knowledge Protectiveness and Supplier Absorptive Capacity in Joint New Product Development

Despite numerous merits of joint new product development (NPD), a buying firm's fear of losing its proprietary knowledge and its reluctance to share the intellectual capital with its supplier may undermine an NPD effort. In addition, the buyer's engineering change orders against dynamic demands can influence NPD performances. With that in mind, this paper aims to identify important influencing factors for the NPD success through the empirical analysis of Korean firms. The major findings of this study are twofold. First, supplier absorptive capacity has a positive effect on NPD performances. Second, when the buyer's knowledge protectiveness is strong, supplier absorptive capacity negatively affects NPD performances. These results indicate that the buyer's knowledge protection policy plays a key role in the successful implementation of NPD. Finally, the buyer's willingness to share information and knowledge with the supplier is critical for the success of NPD with the buyer's backward knowledge transfer.