Relational resources for emerging markets’ non-technological innovation: insights from China and Taiwan

Abstract

Purpose: This paper aims to highlight the importance of relational resources (trust and relationship effectiveness). The authors investigate how the Chinese guanxi is utilized to create and develop service exploitation and exploration activities for adopting non-technological innovations. Design/methodology/approach: This study surveyed 252 Chinese and Taiwanese firms. The results were analyzed through structural equation model. Findings: Relational antecedents of collaborative communication and constructive conflict positively relate to trust, as well as to relationship effectiveness. Constructive conflict positively relates to exploration and exploitation. Relationship effectiveness and trust mediate two relational antecedents to exploitation. Relationship effectiveness crucially mediates two relational antecedents to exploration. Research limitations/implications: Dyadic data would be more desirable to study firm interactions. Practical implications: Chinese society perceives conflict as being detrimental to relationships. Constructive conflict enhances inter-firm trust and relationship effectiveness. Relationship effectiveness, which motivates suppliers to mobilize their guanxi network, mediates the supplier–customer interaction in broadening relationships to produce new services, as well as reinforcing networks to strengthen existing ventures. Originality/value: This study contributes to a relatively under-explored relationship effectiveness area. Chinese suppliers capitalize their guanxi networks to achieve competitive advantages in non-technological innovation.