Unpacking when and how customer involvement as co-developer affects supplier new product performance

Scholars and practitioners concur on the importance of involving business customers in the development of new products as a viable solution to suppliers’ need for continuous improvement in innovation and enhanced performance. Yet, under certain circumstances, the difficulties of involving customers as co-developers in collaborative innovation projects can outweigh the benefits. We adopt the social context and task experience sub-dimensions of organizational learning theory to investigate whether and under what conditions customer involvement as co-developer (CIC) improves or impairs the supplier’s market-based, new product performance. Using quasi-longitudinal, lagged survey data from 217 Chinese manufacturing suppliers, we find that CIC has an inverted U-shaped relationship to new product performance. Trust negatively and shared vision positively moderate this relationship, while social interactions do not significantly influence the effectiveness of CIC practices. Finally, market experience negatively moderates the inverted U-shaped link between CIC and new product performance.