Exploring the effect of buyer engagement on green product innovation: Empirical evidence from manufacturers

Abstract

In this study, we are interested in how export firms organize knowledge management and increase product innovation performance. Prior studies have concluded that knowledge transfer from external actors leads to operational performance outcomes; others have questioned the positive influence of buyer‐driven knowledge transfer activities on innovation performance. Drawing on absorptive capacity, we aim to offer a better understanding, how export firms as recipients of knowledge resources, organize their internal capabilities in order to realize firm‐level product innovation. This empirical study examines the interplay of buyer‐driven knowledge activities, resource acquisition and combining, and product innovation outcomes in the context of Pakistani export firms. Drawing on survey data from 239 export‐manufacturing firms, we test hypotheses using structural equation modeling. Our findings show that buyer‐driven knowledge transfer activities play a crucial role in enhancing export firms in absorbing and combining resources that lead to product innovation. The pragmatic suggestion of the research suggests that managers look closely at developing a culture of involvement with their buyers that promotes the development of knowledge resources. The results of this study have research, policy, and managerial implications.

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