Dependency, resource depth, and supplier performance during industry downturn

This paper examines the effects of supplier dependency and resource depth on the performance of telecommunications suppliers during an industry downturn. It is shown that the R&D carried out independently by a supplier relates positively to the technological depth of the supplier's offering, which is further positively linked to performance. In contrast, the dependency of a supplier shows a negative curvilinear relationship (inverted U) to performance. The research policy implication of our finding is that, in addition to collaborative R&D, a supplier should also be encouraged to initiate its own independent R&D in order to reduce the potential distress on the business during an industry downturn. (c) 2004 Elsevier B.V. All rights reserved.