Can Bilateral Investments And Guanxi Become The Sources Of Co-innovational Performance On Marketing Channels?

Currently, with the decline in the technology refresh cycle and rise in research and develop cost, co-innovation has acted as an avenue for companies to cope with those uncertainties and to achieve sustainable competitive advantages. Therefore, One concern is received huge attention that how to build and achieve the co-innovation performance. Resource-based view suggests that the competitive advantage arises from the competitive resource. Specific investment, a start of cooperation, is a very important investment in the process of cooperation, deciding whether companies can conduct the cooperation successfully. Although the importance of specific investments has reached agreement in the recent literature, it does not mean that specific investments only exert positive influence in cooperation without posing any threat to cooperation. Specific investment, especially unilateral specific investment, can lead to potential opportunism behaviors, which affect the successful rate of co-innovation. According to social capital theory, any transaction is embedded in certain social network. Hence, resource from the network can affect the transaction. In this paper, guanxi is considered as the resource. As a consequence, the concern is popular in the both business circles and scholar circles that how to make specific investment and guanxi become the source of co-innovationThe prior literature has put forward how to reduce or avoid the opportunism behaviors specific investments brought about from two perspectives, contractual governance based on Transaction Cost Economics and relational governance based on Relation Exchange Theory. The former proposes that the potential risks in the process of cooperation can be reduced or eliminated by drafting and signing formal contract, but the latter argues that the formal contract cannot cover all risks in the course of cooperation; therefore, companies should develop the relationship with partners to prevent those risks from happening. In this article, guanxi, which has been used as an independent variable, can function as a way to control risks happening during the cooperation.In addition, only prevention of opportunism behaviors cannot guarantee the occurrence of co-innovation performance, since the nature of innovation lies in the generation of new knowledge. The co-innovation entails the dissemination and internalization of knowledge from partners, generating new knowledge. Those should be achieved by taking advantages of inter-organizational learning activities. This paper uses relationship learning to represent the inter-organizational learning activities, because relationship learning puts more emphasis on the flow of intangible knowledge which plays a crucial role in innovation.Based on the extension of Resource based theory, this paper explores imparts of bilateral investments and guanxi in marketing channels on co-innovational performance. Utilizing and analyzing the data collected from225manufacturers in China, this empirical research unveils that bilateral investments and guanxi facilitate relationship learning and co-innovational performance. Meanwhile, the interaction of bilateral investments and guanxi on relationship is positively significant, but that on co-innovational performance is not significant. However, relationship learning has a positive connection with co-innovational performance. In addition, formal contract functioning as a moderator strengthen the relationship between guanxi and relationship learning, but the result does not occur between bilateral investments and relationship learning. The conclusions have the far-reaching influence on the marketing channel cooperation in the context of China. In addition, another contribution in the paper focuses on the expansion of RBV from a single firm to the alliance.