The effects of supply chain fairness and the buyer’s power sources on the innovation performance of the supplier: a mediating role of social capital accumulation

Abstract

PurposeThis study aims to examine the effects of contractual fairness and power sources on the relationship between the buyer and supplier on the innovation performance of the supplier. The mediating role of social capital accumulation between fairness, power and innovation performance was empirically explored.Design/methodology/approachHypotheses were developed to investigate the relationships between supply chain fairness, power sources, social capital and innovation performance. Using structural equation modeling, the hypotheses were tested on data of 209 responses collected from supplying firms in South Korea.FindingsThis study finds that supply chain contractual fairness and referent power use contribute to the innovation performance of the supplier through social capital accumulation between the buyer and supplier. Coercive power, in contrast, impedes the performance improvement of the supplier.Originality/valueThis study provides supply chain practitioners, academics and policy-makers with guidance on how to facilitate and enhance innovation capabilities and performance across the supply chain. By applying social capital theory, this study also provides theoretical underpinning of the literature on supply chain fairness, power and innovation.