An investigation of the cross-border supplier development process: Problems and implications in an emerging economy

• Using a novel approach drawing data both from the buyers and suppliers, the paper provides a dynamic process based view of cross-border supplier development process.
• We identify three stages of supplier development process and knowledge transfer in supplier development programmes.
• We highlight the key relational and operational ties and the early importance of the suppliers’ absorptive capacity in supplier development programmes.
• Notions of stasis implied by predominantly cross-sectional research into supplier development are challenged and the findings reveal many factors that demonstrate temporal dynamics.
• The paper identifies the importance of perception gaps in the cross-border supplier development programmes.

This paper is concerned with supplier development in an emerging-market. The context of the study is the interaction between Pakistani suppliers and Japanese automotive manufacturers in equity joint ventures operating in Pakistan. Using a novel approach, drawing data from buyers ‘and’ suppliers, the paper presents a three-stage (evaluation, exploration and interactive) teleological process theory that highlights the key relational, knowledge transfer, and operational factors that signify each stage. Key conclusions are drawn as to the importance of relational ties, and the early importance of absorptive capacity. Notions of stasis implied by predominantly cross-sectional research into supplier development are challenged and the findings reveal many factors that demonstrate temporal dynamics. The paper also highlights CSR dilemmas for developed-country investors who are establishing supplier development programmes in developing economies.