What makes social media-based supplier network involvement more effective for new product performance? The role of network structure

Abstract

Fueled by continuing advances in information and social media, the ever-improving social media networks provide firms with unique opportunities to communicate conveniently with their supply chain partners in a dynamic manner. However, a critical unknown is whether buying firms, aiming at enhancing new product performance, can benefit from their suppliers’ participation in social media networks. Building on social network theory, and using a longitudinal design and secondary proxy dataset of 256 buying firms and their suppliers, the authors find that social media-based supplier network involvement can generate superior new product performance of buying firms. Additionally, social media-based supplier network involvement is more effective for new product performance when this network of suppliers shows strong network strength and network heterogeneity. In contrast, network density is found to be counter-productive. The results provide guidelines for managers interested in improving their innovation outcomes through social media networks.