The effects of degree centrality and process innovation in the relationship of supplier participation and innovation performance of SMEs

This study examines the influence of supplier participation (SP), process innovation, and degree centrality on product innovation performance of small and medium-sized firms (SMEs) in China. There is an increasing awareness that the supplier is a key external information source for driving innovation in SMEs. However, existing studies on the impact of SP are inconsistent. This research quantifies the mediating effects of SMEs’ degree centrality and process innovation between SP and innovation performance. Drawing on a sample of 1989 SMEs in China, the study reveals that degree centrality partially mediates the impact of SP on innovation performance, highlighting the importance of a central position within supply chain networks. Additionally, both degree centrality and process innovation exert direct positive effects on product innovation performance. Moreover, technology commercialization moderates the relationship between degree centrality and product innovation performance. These insights advance the understanding of open innovation in SMEs and provide practical implications for managers seeking to optimize their innovation strategies.