HALE EXPANDS PORTABLE PUMP PRODUCTION

Abstract

Globalization and economic integration initiatives in Southeast Asia encourage local supplier firms in Southeast Asia to enter foreign and local leading firms' supply chains and obtain new knowledge. However, most Southeast Asian suppliers cannot fulfill potential buyers' requirements for quality, cost, and delivery control. This study investigates whether Kaizen (Japanese style of continuous improvement) practices facilitate backward knowledge transfer to local suppliers from their buyers (i.e., knowledge transfer from a buyer to its supplier). This study also examines if a firm's buyer-transfer knowledge also promotes knowledge transfer to its supplier. Empirical analyses provide evidence of the association of Kaizen activities with backward knowledge transfer for process improvement but do not show the association with backward knowledge transfer for buyer–supplier product co-design. Backward knowledge transfer to a supplier stimulates backward knowledge transfer from the supplier to its supplier for process improvement and product co-design.