How Ego-Network Embeddedness Affects Innovation Performance in Response to Stability of Supply Chain Network

This article explores how network centrality and structural holes of firms’ supply chain network shape its innovation performance and how supply chain stability moderates these relationships. Drawing on 2,328 relationships among China-listed manufacturing firms, we constructed a comprehensive ego-network of supply chains and empirically tested these relationships. The findings suggest a nonlinear ( U -shaped) effect of supply chain network centrality and structural holes on innovation performance, indicating that either a very low or high level of network centrality and structural hole is beneficial to firms’ innovation. Additionally, we discovered that the effect of network centrality and structural hole on firms’ innovation performance are weakened and strengthened, respectively, by the stability of their supply chain network. This study provides a plausible explanation for the dual impact of supply chain network embeddedness (i.e., network centrality and structural holes) and network stability on innovation performance, highlighting a need to strategically optimize firms’ supply chain network embeddedness while managing supply chain network’s stability to enhance innovation performance.