SUPPLIER INNOVATION IN THE PRESENCE OF BUYER POWER

Zhiqi Chen

International Economic Review, 2019, vol. 60, issue 1, 329-353

Abstract: This article analyzes the impact of retailer buyer power on a supplier's incentive to conduct innovation, with a focus on the supplier's investment in product variety and quality improvement. The analysis shows that an increase in buyer power, manifested through either a weakening of the supplier's bargaining position or a strengthening of a large retailer's bargaining power, leads to greater product variety and higher quality if the elasticity of demand is not too large. Increased buyer power, manifested through a strengthening of a large retailer's bargaining position, stimulates the supplier to invest more in quality improvement.

Date: 2019
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https://doi.org/10.1111/iere.12355

Related works:
Working Paper: Supplier Innovation in the Presence of Buyer Power (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:iecrev:v:60:y:2019:i:1:p:329-353

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