Knowledge spillovers through quality control requirements on innovation development of global suppliers: The firm size effects

Customers' outsourcing relationships with global suppliers have received increasing attention in recent decades. However, how global suppliers of different firm sizes maintain innovation development under customer coercive pressure has received little empirical study to date. Applying theoretical insights from a coercive isomorphism perspective, this article empirically tests both the moderating effect of supplier firm size and the direct effects of customer quality control requirements, supplier R&D absorptive capacity, and supplier-customer relationship quality on the supplier's propensity to benefit from customer knowledge spillovers. Analyzing a sample of 266 global suppliers in China with hierarchical regression technique, our findings demonstrate that, for smaller suppliers, customer quality control requirements significantly enhance innovation development while having no impact on larger suppliers' innovation development. Our findings also show that supplier firm size moderates the effects of customer quality control requirements and supplier R&D absorptive capacity on supplier innovation development. This article sheds new light on how supplier firm size impacts supplier innovation development under customer coercive pressure.