Managing innovation through co-production in interfirm partnering

Innovation is a key source of knowledge-based competitive advantage. However, research on how firms' co-production enhances innovation is scarce. Thus, this study not only integrates the three dimensions of social capital and examines these dimensions' separate effects on co-production but also incorporates the roles of absorptive capacity and self-efficacy, analyzing their effect on innovation. This study uses a random sampling method to select 221 firms in Taiwan and employs structural equations modeling to test the relationships. The findings indicate that absorptive capacity and self-efficacy enhance innovation. Co-production positively affects innovation, absorptive capacity, and self-efficacy. The findings also support positive relationships between social capital and co-production. This study contributes to the little research that explores partnership co-production in innovation.