The double-edged sword of customer participation on new product development performance: the contingent roles of relational and environmental factors

ABSTRACT

Although customer participation plays an increasingly important role in firm innovation, both its effects on new product development (NPD) performance in the B2B context and the underlying mechanisms remain unclear in the extant literature. Building on the boundary spanning theory, we investigate the double-edged effects of customer participation on NPD performance by explicating the mediating roles of knowledge sharing and customer – developer conflict. Based on a sample of 167 high-tech firms in China, our findings indicate that customer participation can improve NPD performance through knowledge sharing but decrease NPD performance by exacerbating the conflict between the developer firm and its customer. Furthermore, previous cooperation experience attenuates the effects of customer participation on knowledge sharing and customer – developer conflict, whereas technological turbulence strengthens the effect of customer participation on knowledge sharing. Our findings offer important implications for both innovation research and practice.

KEYWORDS:

• Customer participation
• bounday spanning
• knowledge sharing
• customer–developer conflict
• new product development
• previous cooperation experience
• technological turbulence

JEL CLASSIFICATION:

• M310

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ There were 13,401 firms listed in the directory. We collaborated with a business research firm to randomly select 500 firms from the directory.

² The three items for market innovativeness are: 1) The benefits the product offers are new to customers; 2) this product introduces many completely new features to the market; 3) the product shows an unconventional way of solving problems.

³ As some values for these two variables are missing, the sample for the robustness tests includes 155 firms.

⁴ In general, NPD performance improves overall performance. There are also, however, several differences between them. For example, NPD performance mainly reflects long-term performance while overall performance reflects current performance. Thus, it may result in minor differences in the results of the mediation analyses. Given these differences between overall performance and NPD performance, we encourage future studies to explicitly clarify the distinctiveness underlying the theoretical mechanisms with customer participation.

⁵ We adopted a four-item scale from Bai, Sheng, and Juan Li (2016) and Sheng, Zheng Zhou, and Juan Li (2011) to measure government support: 1) The government and its agencies have implemented policies and programs that have been beneficial to business operation; 2) the government and its agencies have provided needed technology information and other technical support; 3) the government and its agencies have provided very important market information; 4) the government and its agencies have helped your firm to obtain licences to import technology, manufacturing and raw materials, and equipment.

⁶ We thank the reviewing team for suggesting these insightful points.

Additional information

Funding

Jason Lu Jin acknowledges the support from the National Natural Science Foundation of China [No. 72002156] and Shenzhen Science and Technology Programme [No. 2023A012]. Liwen Wang acknowledges the support from the National Natural Science Foundation of China [No. 71902118], Shenzhen Natural Science Fund [the Stable Support Plan Programme 20200812152055001] and Shenzhen Humanities & Social Sciences Key Research Bases.