Intellectual capital as enhancer of product novelty. An empirical study of Russian manufacturing SMEs
| Published date | 10 April 2017 |
| Date | 10 April 2017 |
| DOI | https://doi.org/10.1108/JIC-06-2016-0059 |
| Pages | 419-436 |
| Author | Mariia Molodchik,Carlos Maria Jardon |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
Intellectual capital as enhancer
of product novelty
An empirical study of Russian
manufacturing SMEs
Mariia Molodchik
ID LAB, National Research University Higher School of Economics,
Perm, Russia, and
Carlos Maria Jardon
Department of Applied Economics, Universidad de Vigo, Vigo, Spain and
National Research University Higher School of Economics, Perm, Russia
Abstract
Purpose –The purpose of this paper is to theoretically justify the link between the endowment of intellectual
capital (IC) and product novelty, and to find empirical evidence for such a link for small and medium-sized
enterprises (SMEs) in the Russian business environment.
Design/methodology/approach –The study implements an intellectual capital-based view and the
concept of novelty proposed by Schumpeter to highlight the crucial role of knowledge for transition to a
higher level of competition. Drawing on a literature review, the authors determine three specific components
of IC: foreign human capital, information and communication technology (ICT) capital developed at an
international level and cooperation with foreign partners in order to pinpoint a premier position on the next
level of the market. For empirical testing of the proposed model, a data set comprising more than 1,400
Russian manufacturing SMEs was used. Estimations were performed with the help of a principal component
analysis and ordinal logistic regression.
Findings –The findings reveal that higher (IC) endowment promotes the level of product novelty.
For Russian manufacturing SMEs, the most important is R&D capital. At the same time, ICT capital
developed at an international level and cooperation with foreign partners contribute significantly to the
probability of transition to a new market level.
Research limitations/implications –The study employs cross-sectional data that restrict the analysis of
innovation dynamics.
Practical implications –The study appears to have policy implications for the development of
governmental programmes for Russian SMEs such as the creation of IC awareness, training for IC
management, special programmes for R&D support and ICT capital accumulation.
Originality/value –This paper proposes a new approach for investigating the “knowledge-innovation”
link, shifting the focus from a general analysis of product innovation to a level of novelty for product
innovation. This is the first empirical study of the relationship between IC components and the level of
product novelty for SMEs in the context of the Russian business environment.
Keywords Russia, SMEs, Intellectual capital, Product innovation, Novelty level
Paper type Research paper
Introduction
Trends during the past decades such as globalization, technological evolution and
higher customer expectations make innovation a core company capability (Delgado-Verde
et al., 2011a, b). Among different types of innovations, product innovation has become
crucial for bridging a company’s intentions to enter into new markets and to effect customer
willingness for testing new products. Moreover, product innovations are associated with
higher performance and long-term company growth (Costa et al., 2014). Journal of Intellectual Capital
Vol. 18 No. 2, 2017
pp. 419-436
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-06-2016-0059
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
This study comprises research findings from the project No. 15-18-20039 supported by the Russian
Science Foundation.
419
IC as enhancer
of product
novelty
Most studies investigating productinnovation use surveys and operationalizethe output of
innovation activities via the following question: “During the last three years, did your firm
offer new or significantly improved products (goods or services) to your clients? Yes or No”
(see e.g. Delgado-Verde et al., 2011a, b; Gronum et al., 2012). Fewer studies, however,
differentiate between radical and incremental innovation. Only one study by Amara and
Landry (2005) measured company innovation performance according to the level of novelty
classified in terms of the market, i.e., new to the firm, new to the country or new to the world.
Such change in the operationalization of dependent variable allows for shifting the focu s from a
general presence of innovation to a particular estimation of market levels, i.e., a local, country or
global level. This appears to be significant within the acceleration of globalization during the
past number of decades. The authors of this study were motivated to discover the factors that
can influence penetration into new markets, based on product innovations.
Drawing on a literature review, the authors established the importance of knowledge
accumulation for the success of innovation (Darroch and McNaughton, 2002; Dumay et al., 2013).
When an intellectual capital-based view (ICV) was proposed by Stewart (1997), scholars
attempted finding empirical evidence of the positive influence of intellectual capital (IC)
components such as human, structural and relational capital on the innovation activities of a
company (Darroch and McNaughton, 2002). At the same time, researchers from the field of
innovation management attempted to justify the factors that determine the innovation activities
of a company (Zerenler et al., 2008). The results of studies are mixed; both streams underline the
pivotal role of a company’s intellectual resources for innovation (Schiuma and Lerro, 2008),
particularly for product innovation (Costa et al., 2014).
The aim of this paper is to contribute to the development of ICV by answering the
question of whether and how IC influences the transition to a higher level of product
novelty, measured in terms of the market. Therefore, the objective of the present study is to
develop a theoretical model for justifying the link between IC endowment and the level
of product novelty. The authors hope that the proposed model will be applicable to a range
of different research contexts.
For empirical testing of the proposed model, the authors focused on small and medium-
sized enterprises (SMEs) in the Russian business context. The choice of size and country in
terms of enterprise was determined for several reasons. First, previous studies have found
that size matters in terms of “knowledge-innovation”and that SMEs have specific
characteristics pertaining to IC employment and innovationbehaviour (Wong and Aspinwall,
2004). Second, the Russian innovation landscape is an interesting case, since it experiences
path-dependencies from Soviet science and technology systems attempting to retain its
specific strengths and minimizing its weaknesses (Gurkov, 2006). Russian SMEs face
challenges in terms of developing innovation capabilities and internationalization, based on
innovative products (Filippov, 2011; Gokhberg and Kuznetsova, 2015). The authors of this
study were thereforemotivated to investigate the factors thatare essential for facilitating the
process of innovation-driven international expansion. Taking this into account, one more
objective of the current paper was to establish empirical evidence for the “intellectual
resources-product novelty”link for Russian SMEs in order to answer the question of what
type of IC components –e.g., human, structural and relational capital –will increase the
probability of launching new products at a higher market level.
To the authors’knowledge, this study is the first to analyze the relationship between
intellectual resources and product novelty level in the context of the Russian business
environment. Previous studies such as those by Andreeva and Garanina (2016) and
Tovstiga and Tulugurova (2009) were devoted to the relationship between “intellectual
capital-company performance”. This study provides an analysis of the elements of IC that
allow Russian companies to enter into wider markets with their innovations and in
particular, facilitates internationalization.
420
JIC
18,2
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