Supplier Opportunism in Buyer-Supplier New Product Development: A China-U.S. Study of Antecedents, Consequences, and Cultural/Institutional Contexts

Collaborating with a supplier in a buying firm’s new product development (NPD) project is commonly advocated and adopted, but does not always improve project performance. Some pre-existing collaboration contexts, such as buyer-supplier NPD projects, are especially exposed to supplier opportunism due to the uncertain nature of the collaboration process. Adopting agency theory and transaction cost theory (TCT) perspectives, we examine (i) contextual antecedents and project consequences of supplier opportunism, and (ii) if these causal influences vary in different cultural and institutional contexts. Using a survey sample of 214 United States (U.S.) and 212 Chinese buying firms’ responses about buyer-supplier NPD projects, we find that supplier opportunism is significantly influenced by the task and relational contexts. We also show that supplier opportunism damages both design quality and efficiency, two aspects of project performance. When comparing U.S. to China, we find that task and relational contexts have a greater impact on supplier opportunism in the U.S., but design efficiency is less hurt by supplier opportunism there. Finally, we show challenges of preventing supplier opportunism in certain NPD collaboration contexts, and offer solutions for overcoming these challenges. Decision Sciences