The Direct and Indirect Impact of Relational Ties on Innovation Performance: An Empirical Study in China.

This paper aims to understand the underlying mechanisms by which relational ties influence firm innovation. Companies in China rely much on relational ties to implement business strategies. Combining social network theory with dynamic capability perspective, we build a model that analyzes the direct and indirect impact of relational ties (business ties and service ties) on innovation performance through supply chain adaptability. We further analyze that technological turbulence and dysfunctional competition influence the relationships between relational ties and supply chain adaptability. We test these relationships using data collected from 300 manufacturers in China. The results show that service ties plays a relatively more important role than business ties in enhancing innovation performance directly. Interactions between business ties and service ties significantly influence innovation performance. Moreover, our results demonstrate that supply chain adaptability fully mediates the relationship between business ties and innovation performance but partially mediates the relationship between service ties and innovation performance. Our results show that technological turbulence positively moderates the relationships between business/service ties and supply chain adaptability. In addition, dysfunctional competition negatively moderates the relationship between business ties and supply chain adaptability. Overall, our findings contribute to the understanding of the roles of relational ties in supply chain. [ABSTRACT FROM AUTHOR]