Effects of information sources for new customers and suppliers on the immediate innovation output of firms

Abstract

The purpose of this paper is to propose a typology of the information sources for new customers or suppliers on the basis of their existing relational linkage with the acquiring firm and to further explore whether various types of information sources for new customers and suppliers have any differential effect on a firm’s immediate innovation output.,The research sample was taken from the data collected by WB enterprise surveys (2005). The WB enterprise survey is considerably comprehensive for firm-level data. Relevant questions for the study were extracted from the survey. Simultaneously, EFA, CFA and SEM using AMOS 6.0 was run for the analysis.,The findings confirm that sources for a new customer and supplier with a strong relational aspect have a significant positive effect on a firm’s innovation output in the immediately following period.,The research acknowledges the need to measure the effect of new supplier/customer on innovation depending on the type of information sources separately for product and process innovation as one of the major limitations.,This research can help managers obtain information of holistic and critical nature to incorporate in decision making for improving firm performance in innovation.,Customers and suppliers are well-established external sources of innovation ideas and information. But to what extant new customers or suppliers may be effective resources for innovation may depend largely on the sources through which they themselves are acquired by a firm, which is relatively unexplored. This study addresses the gap is the first of its kind to explore the role of the sources of information for new customer/supplier on a firm’s innovation output in the immediately following period.