Supplier-base concentration as a moderating variable in the non-linear relationship between R&D and firm value

Despite the important role of suppliers in R&D activity, the supply chain relationships involved in R&D value creation have been under-investigated in previous research. Supplier involvement in R&D necessitates a model that examines how the buyer–supplier relationship influences the relationship between R&D investment and a company's market value. With a large-scale sample of 4,704 firm-year observations within the Chinese manufacturing sector, this study investigates the relationships among R&D investment, supplier-base concentration, and firm value. The results indicate that there is a non-linear, inverted U-shaped relationship between R&D intensity and Tobin's q, with the specific shape of this relationship dependent on supplier-base concentration. By highlighting the moderating effect of supplier-base concentration on the curvilinear relationship between R&D investment and firm value, this study contributes to the existing literature on technology, innovation, and supply chain management by shedding new light on value creation achieved through the interface between R&D and supply chains in the context of emerging markets. Our findings emphasise the importance of supplier relationship management to ensure successful R&D value creation activity in the manufacturing sector.