Supplier involvement in eco-innovation: The co-development of electric, hybrid and fuel cell technologies within the Japanese automotive industry

Abstract

The co-development of electric, hybrid and fuel cell technologies within the Japanese automotive industry ABSTRACT: Recently, automakers have invested heavily in alternative fuel technologies to reduce carbon dioxide (CO2) and nitrogen oxide (NOx) emissions from vehicles. Yet we know comparatively little about how automakers work collaboratively with their suppliers to develop interorganizational eco-innovations. We address this research gap and contribute to the ecoinnovation literature by investigating whether suppliers' eco-innovation capabilities in electric, hybrid, and fuel cell technologies influence the degree of eco-innovation co-patenting between Toyota and its suppliers. We also expand research in the strategic alliance literature by exploring the moderating effects of alliance partner diversity. To test our research hypotheses we use data from firms in the Toyota supplier association together with negative binomial and zero-inflated negative binomial regression models. Our empirical results demonstrate that supplier electric capabilities and supplier hybrid capabilities are positively related to the occurrence of eco-innovation co-patents. However, supplier fuel cell capabilities have no effect on eco-innovation co-patenting, especially as firms often choose to develop this technology inhouse. Moreover, alliance partner diversity has a negative moderating effect on the relationships between supplier electric capabilities, supplier hybrid capabilities, and ecoinnovation co-patents. Finally, we evaluate how our findings from the Toyota supplier association compare to similar Japanese automakers and their supplier networks.

Exploring supplier–supplier innovations within the Toyota supply network: A supply network perspective

“…Specifically, it may be the case that firms with a large manufacturing presence within Japan have helped to develop the engineering and R&D capabilities of their local suppliers so they become more effective at generating supplier–supplier innovations (Dyer & Nobeoka, 2000; Lawson et al, 2015). Furthermore, firms with a large domestic manufacturing network with mother plants, showcase suppliers, and lead factories within Japan exhibit a strong orientation toward exploring new knowledge and developing new products with local suppliers, as prior research has established (Dyer & Nobeoka, 2000; Ferdows et al, 2016; Potter & Graham, 2018). With this finding we highlight the need to go beyond the analysis of structural characteristics of the supply network and take the geographic dimension of domestic manufacturing networks into account (Cheng et al, 2015; Rudberg & Olhager, 2003).…”

“…Patents are a widely used measure of the innovation performance of different organizations (Artz, Norman, Hatfield, & Cardinal, 2010; Liu, Yeung, Lo, & Cheng, 2014). To capture the degree of inter‐firm innovation, an alternative measure focuses on the total number of co‐patents a firm generates during a specific period (Kim & Song, 2007; Potter & Graham, 2018). Within this study, we use patent data from the Japan Platform for Patent Information (JPPI) database that is managed by the Japan Patent Office.…”

“…Automakers and suppliers have invested in green technologies, so we also checked whether the results might be more pronounced among green technology suppliers. Similar to Borgstedt et al (2017) and Potter and Graham (2018), we used data from the JPO and searched patent titles, abstracts, and codes registered by different firms to identify if they had developed any eco‐innovations used in vehicles that were powered by hybrid, electric, or hydrogen fuel cell powertrains during a 4‐year period. This dichotomous variable, Green Technology Supplier (GTS), measures whether a firm had patented an eco‐innovation in green technology (1 = yes).…”

“…Thus, beyond the traditional structural characteristics of the supply network, we also add a geographical dimension that captures the density of manufacturing plants that each firm operates within Japan. Although globalization has encouraged many firms to establish manufacturing plants in low‐cost locations and emerging markets, Japanese automotive component manufacturers also have retained and expanded their manufacturing plants within Japan (Aoki & Lennerfors, 2013; Dyer & Nobeoka, 2000; Potter & Graham, 2018). In fact, the majority of first‐tier suppliers (78%) and second‐tier suppliers (65%) in the Toyota supply network are located in Japan (Kito et al, 2014), and many of these firms manage large domestic networks of manufacturing plants.…”

“…In fact, the majority of first‐tier suppliers (78%) and second‐tier suppliers (65%) in the Toyota supply network are located in Japan (Kito et al, 2014), and many of these firms manage large domestic networks of manufacturing plants. In particular, maintaining a large number of manufacturing plants within Japan helps to foster greater synergies with local suppliers related to alternative fuel technologies (Belderbos, Cassiman, Faems, Leten, & van Looy, 2014; Potter & Graham, 2018). Thus, local manufacturing plants may have a more strategic role, reflecting the typically tight integration of manufacturing and research capabilities through local network ties with the automaker (Aoki & Lennerfors, 2013; Morgan & Liker, 2006).…”