The dark side of trust in global value chains: Taiwan’s electronics and IT hardware industries

Journal of World Business, 56 (4), 101195. https://doi.org/10.1016/j.jwb.2021.101195

The University of Auckland Business School Research Paper Forthcoming

49 Pages Posted: 7 Apr 2021

See all articles by Noemi Sinkovics

Noemi Sinkovics

University of Auckland Business School

Chia-Ling (Eunice) Liu

National Taiwan University

Rudolf R Sinkovics

University of Auckland Business School

Ram Mudambi

Temple University - Department of Strategic Management

Date Written: March 31, 2021

Abstract

This paper contributes to theory building efforts around the concept of knowledge connectivity and its role in suppliers’ new product innovation capability under different inter-firm knowledge pipeline conditions. We use the Taiwanese electronics and IT hardware industries as our study context, given Taiwan’s phenomenal success story in entering global value chains (GVCs) in these industries. Our results demonstrate that different pipeline conditions in the form of combinations of the levels of inter-firm trust and supplier functional sophistication indeed shape the way knowledge connectivity is activated and how it impacts on suppliers’ new product innovation capability and ultimately GVC status. Our results indicate that suppliers’ new product innovation capability is larger under low inter-firm trust conditions. Suppliers in such low inter-firm trust relationships are also more likely to use the ensuing increase in their GVC status to pursue new, better paying buyers than their counterparts in high inter-firm trust relationships. As a consequence, if multinational buyer firms in low trust relationships would like to benefit more from their suppliers’ enhanced innovation capabilities, they may need to strengthen their supplier relations using modalities other than trust.

Keywords: global value chains, knowledge connectivity, new product innovation capability, upgrading, Taiwan

Suggested Citation

Sinkovics, Noemi and Liu, Chia-Ling (Eunice) and Sinkovics, Rudolf R and Mudambi, Ram, The dark side of trust in global value chains: Taiwan’s electronics and IT hardware industries (March 31, 2021). Journal of World Business, 56 (4), 101195. https://doi.org/10.1016/j.jwb.2021.101195, The University of Auckland Business School Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=3816348

Noemi Sinkovics

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

HOME PAGE: https://unidirectory.auckland.ac.nz/profile/noemi-sinkovics

Chia-Ling (Eunice) Liu

National Taiwan University ( email )

1 Sec. 4, Roosevelt Road
Taipei 106, 106
Taiwan

Rudolf R Sinkovics (Contact Author)

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand
+64 9 923 6359 (Phone)

HOME PAGE: http://unidirectory.auckland.ac.nz/profile/rudolf-sinkovics

Ram Mudambi

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States
215-204-2099 (Phone)
215-204-8029 (Fax)

HOME PAGE: http://sbm.temple.edu/~rmudambi/index.html

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
15
Abstract Views
72
PlumX Metrics