Supply‐Chain Analysts and Supplier Relationship‐Specific Innovation

ABSTRACT This study empirically examines whether and how supply‐chain financial analysts who study both a supplier and its buyer influence supplier relationship‐specific innovation. Our main analysis finds that supplier firms followed by supply‐chain analysts generate more relationship‐specific patents than other suppliers. These effects are stronger for suppliers in high input specificity industries, where hold‐up concerns and dependencies on the economic prospects of major buyers are more serious, and for suppliers in early‐stage relationships with major buyers, when both relationship uncertainty and information asymmetries between trading partners are high. Identification strategies based on exogenous shocks and the instrumental variable analysis support causal inference. Post hoc analyses suggest that supply‐chain analysts act as effective information intermediaries between suppliers, buyers, and outside investors, thereby fostering supplier innovation. This study extends social network and relational theories, along with the supply chain innovation literature, shedding new light on the distinctive role of supply‐chain analysts in nurturing supplier innovation. Managers of supplier and buyer firms should recognize the importance of specialized analysts as sources of information to improve innovative initiatives and influence network partners.