Partnerships have become an important research topic. However, the amount of empirical attention devoted to determining how firms intensively co-produce with alliance partners to improve their innovation performance is lacking. In response to the growing importance of co-production in the partnerships, this study addresses how firms integrate their alliance partners as co-creators into the innovation process. Specifically, this study not only integrates the three dimensions of social capital and examines their separate effects on co-production but also incorporates the roles of absorptive capacity and self-efficacy and investigates their influences on innovation. That is, co-production may operate through absorptive capacity and self-efficacy to increase innovation because knowledge is exchanged and utilized and firms are willing to select challenging goals and remain firmly committed to fulfill them within the network. The proposed model is tested with a structural equation model(SEM). Findings indicate positive relationships between social capital and co-production. Moreover, co-production has positive effects on innovation, absorptive capacity, and self-efficacy. Absorptive capacity and self-efficacy enhance innovation. As such, we suggest that co-production should be considered explicitly in the management of a partnership and should be developed through mentioned above platform, encouraging and enabling both parties to work together for the implementation of innovation.

• Li-Wei Wu(Tunghai University)
• Chung-Yu Wang(National Kaohsiung University of Applied Sciences)
• Ya-Ting Wu(Tainan University of Technology)