Supply chain of innovation and new product development

•In this paper we conceptualize the supply chain of innovation (SCoI).•We compare the supply chain of innovation and the supply chain of materials.•We focus on the relationship between purchasing/selling R&D and NPD.•We study the role of relational embeddedness within the innovation network.

This paper conceptualizes the supply chain of innovation of a company as its supply chain not related to physical goods exchanges but to R&D commodities exchanges. R&D commodities, being the outcomes of research activities, are for example patents, technologies, research services, studies, projects, etc. Specifically, we focus on the relationship between the activities of purchasing/selling R&D commodities and the propensity of the firm to develop new products; we examine how the position of the firm within its innovation network moderates this relationship. The empirical setting of the research consists of a cross-sectional dataset of 544 biopharmaceutical companies that have signed 1772 R&D agreements in the years 2006–2010. We find firstly, evidence of the supply chain of innovation (as a natural evolution of the well-acknowledged dual-market model of the biopharmaceutical industry). Secondly, we find that the relational embeddedness, coming from innovation network, influences the effect of purchasing and selling R&D commodities on new product development. Supporting our theoretical predictions, this paper offers contributions to the scientific literature on supply chain relationships in new product development.