Enablers and Consequences of Interfirm Co-Production

As contemporary firms increase their reliance on information technology (IT) and are increasingly turning their attention to jointly creating value with their primary stakeholders, there is a growing need to understand what enablers promote from interfirm value co-creation from co-production in supply chains, how the co-production can be realized and what value can be created through the co-production. We integrate systems theory and the relational view perspectives to develop an explanatory model to explain how co-production mediates the impacts of enablers on the reciprocal benefits created in the global supply chain context. Drawing upon systems theory, we identify three constructs: platform compatibility (i.e., compatibility), co-production (i.e., synergy), and collaborative governance (i.e., integration effort). We draw on the relational view to identify two activities: process alignment and resource sharing for co-production, conceptualize three basic types of reciprocal benefits: market, innovation and anshin value, and theorize co-production—the synergy of process alignment and resource sharing activities—as key to the realization of synergy, thereby contributing to the reciprocal benefits in the context of interfirm supply chain. Based on survey data collected from 464 senior management representatives from 230 high-tech manufacturing firms from within Taiwan and China, we found 1) collaborative governance has a positive effect on platform compatibility, 2) both collaborative governance and platform compatibility promote co-production, 3) guanxi has a positive effect on collaborative governance and has a positive moderating effect on collaborative governance and co-production, and 4) co-production positively affects reciprocal benefits. Our findings highlight 1) the important role of co-production in mediating the platform compatibility and collaborative governance effects on reciprocal benefits, and 2) the complementary role of guanxi in strengthening the collaborative governance effect on co-production. These results provide insights into how firms can co-create value through enhanced interfirm co-production.