Global supply chains offer a range of expertise to suppliers interested in generating innovative new products from their close, working relationships with other firms. However, research on whether and how social capital between firms can be leveraged for innovation is equivocal, conceptualizing little of the underlying processes responsible for mobilizing social capital and yielding mostly contradictory empirical results. This study proposes and tests the intermediate mechanisms of proactive customer orientation and joint learning capability as two distinctive capabilities that may account for the way social capital drives relationship-based radical innovation. The conceptual model posits the social capital-innovation link is neither simple nor direct, and an empirical test on 204 Taiwanese suppliers demonstrates the complexity of the innovation generation process. Largely confirming our conceptualization, two pathways from social capital to innovation are revealed: joint learning capability fully mediates the link while proactive customer orientation’s role is moderated by aspects of the suppliers tie to its international customer. Finally, implications for theory and practice for innovation in global supply chain relationships are drawn.

• Ruey Jer “Bryan” Jean(National Chengchi University, Taiwan)
• Daekwan Kim(Florida State University, USA)
• Daniel C. Bello(Georgia State University, USA)