A social dilemma analysis on supplier's involvement in new product development in China

Many studies have been conducted to explore the relationship between supplier and manufacturer in new product development. Reviewing the literature, however, it is found that the examination of supplier firms in the relationship is relatively ignored. The aim of this study is to analyze supplier firms when they are involved in manufacturers' new product development based on social dilemma theory. Based on the social dilemma theory, this study proposes three solutions to the supplier involvement: informational sharing, flexibility, and relationship structure. The model is tested using data collected from Chinese supplier firms. The results suggest that informational sharing and relationship structure are important solutions to the supplier's involvement. Flexibility does not influence supplier firm's involvement. Practical implications for managers are discussed.