Supply Chain Common Institutional Investors and Supplier Innovation

Accelerating supplier innovation is of great practical significance for promoting the optimization and upgrading of industrial and supply chains and safeguarding national economic security. Drawing on China’s unique institutional context, this paper develops a three-dimensional analytical framework of “subject–environment–relationship” to characterize the actor attributes, contextual boundaries, and relational conditions under which the core mechanisms operate. It further uncovers the differentiated governance logic through which supply chain common institutional investors drive supplier innovation in a transition economy. The empirical results show that supply chain common institutional investors significantly enhance supplier innovation, primarily through three channels: facilitating innovation-related knowledge spillovers from customers to suppliers, mitigating the “hold-up” problem in supply chains, and improving supply chain stability and operational efficiency. The heterogeneity analysis reveals that this positive effect is more pronounced when common institutional investors have a long-term orientation or a state-owned background, when supply chains exhibit higher customer concentration or stronger customer innovation capability, and when suppliers operate in high-tech industries or regions with weaker intellectual property protection. Tests of economic consequences indicate that the innovation-promoting effect of supply chain common institutional investors enhances suppliers’ firm value and total factor productivity.