Supply Chain Technology Spillover, Customer Concentration, and Product Inventions

Abstract

Using a panel of approximately 1,670 U.S. technology-intensive supplier firms during the period 2001-2013, we find that the number and value of new products of a supplier firm are positively related to technology spillover it receives from its supply chain partners (i.e., buyer firms). However, this positive relation is negatively related to customer concentration, which may be attributed to the supplier firm’s narrowed technology search scope. Our empirical evidence suggests that although a supplier firm may benefit from a “learning by supplying” relation in a supply chain, it is also subject to a “locked-in” issue. On the other hand, we also find that the number and value of new brands of a supplier firm are negatively related to technology spillover when it relies on a more concentrated group of customers.

Keywords: supply chain relationship, technology spillover, product invention, new brands, customer concentration

JEL Classification: O33, L10