Suppliers´ Innovative Capabilities and Their Relationship with Customers: An Evidence from Packaging Machinery Industry in China

In order to compete successfully in the marketplace, suppliers have to develop certain innovative capabilities that, in turn, depend on the type of relationship that is established with customers. Based on a study of 197 suppliers operating in the packaging machinery industry in China, structural equation modeling and multiple hierarchical regression are used to reveal the relationship between suppliers´ innovation capability and their different roles in the supply chain. The research findings lend support to the hypothesis that the level of investment in technology and the acquisition of specific managerial capabilities are to a large extent, a determinant of supplier-customer interdependence.