When can B2B firms improve product innovation capability (PIC) through customer participation (CP)? The moderating role of inter-organizational relationships?

When can B2B firms improve product innovation capability (PIC) through customer participation (CP)? The purpose of this paper is to shed light on this interesting question by providing a framework to interpret how interorganizational relationships (IORs), including customer relationship commitments, firm’s relational capability and bilateral dependence structure moderate the relationship between CP and PIC.

A questionnaire survey is conducted among 376 business to business (B2B) firms located in mainland China. Six hypotheses on how IORs moderate the CP–PIC relationship are examined using hierarchical regression analysis technique.

The empirical research reveals that CP positively impacts PIC of B2B firms, which will be strengthened when either customer affective commitment, supplier’s relational capability or total interdependence is high. In addition, the relationship between CP and PIC weakens as customer’s calculative commitment or interdependence asymmetry strengthens.

This study enriches customer participation literature by highlighting the PIC outcomes of CP and examining the complex and contingent roles of the buyer–supplier relationship in moderating CP’s impact upon PIC.