Does cooperating with customers support the financial performance of business-to-business professional service firms?

The purpose of this paper is to analyze the relationship between Business-to-business professional service firms (B2B PSFs) customer cooperation capability (CCC) and its financial performance. This study explores how deep and broad expert and customer knowledge assist PSFs to enhance CCC and increase financial performance.

A multiple informant survey was designed and administered to B2B PSFs’ managers in Taiwan.

The results indicate that customer and expert knowledge improve PSFs’ CCC and that CCC has a positive U-shaped relationship with financial performance. Importantly, the ability to control for the efficiency of customer cooperation moderates the U-shaped relationship between CCC and financial performance by diminishing the negative effect of low levels of CCC.

The contribution of this study rests on the theory developed and empirical support disclosing the complex relationship between PSFs’ CCC and financial performance. The study further contributes to the literature by presenting different effect of deep and broad expert and customer knowledge on development of CCC. The study extends the literature by introducing control for efficiency of customer cooperation as a mechanism that has the capacity to compensate for lower levels of CCC.