The link between intellectual capital and business performance: a mediation chain approach
| DOI | https://doi.org/10.1108/JIC-12-2019-0302 |
| Published date | 22 October 2020 |
| Date | 22 October 2020 |
| Pages | 401-419 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Susana Campos,José G. Dias,Mário Sérgio Teixeira,Ricardo Jorge Correia |
The link between intellectual
capital and business performance:
a mediation chain approach
Susana Campos
Universidade de Tr
as-os-Montes e Alto Douro (UTAD),
Centro de Estudos Transdisciplinares para o Desenvolvimento (CETRAD),
Vila Real, Portugal
Jos
e G. Dias
Instituto Universit
ario de Lisboa (ISCTE-IUL), Business Research Unit (BRU-IUL),
Lisboa, Portugal
M
ario S
ergio Teixeira
Universidade de Tr
as-os-Montes e Alto Douro (UTAD),
Centro de Estudos Transdisciplinares para o Desenvolvimento (CETRAD),
Vila Real, Portugal, and
Ricardo Jorge Correia
Instituto Polit
ecnico de Bragança, Campus de Santa Apol
onia, Bragança, Portugal
Abstract
Purpose –This study focuses on intellectual capital (IC) as a driver of better business performance. Recent
studies suggest that a set of variables may mediate this relationship. This research discusses the mediating role
of dynamic capabilities, network competence, technological capabilities, absorptive capabilities and innovation
performance between intellectual capital and business performance.
Design/methodology/approach –The conceptual model is tested using a sample of 533 Portuguese firms
by means of a structural equation model.
Findings –It confirms that intellectual capital impacts business performance. Moreover, this only happens
indirectly through the mediating chain defined by the variables dynamic capabilities, network competence,
technological capabilities, absorptive capabilities and innovation performance.
Originality/value –This study analyzes new mediator variables between the dimensions of the intellectual
capital and Portuguese business performance.
Keywords Intellectual capital, Dynamic capabilities, Network competence, Technological capabilities,
Absorptive capabilities, Innovation performance, Business performance
Paper type Research paper
Introduction
Intellectual capital is considered as a key element in the development of organizations’overall
performance (Marr and Chatzkel, 2004;Nonaka and Takeuchi, 1995), a valuable resource
(Barney, 1991) and a form of dynamic and non-static capital (Bratianu, 2018;Edvinsson and
Sullivan, 1996). Intellectual capital has been conceptualized in the literature from different
perspectives; however, there remains little consensus since its seminal definition (Brooking,
1997). Many researchers have explored this concept and established methodologies that can
Intellectual
capital and
business
performance
401
This work was supported by national funds, through the FCT –Portuguese Foundation for Science and
Technology, under the project UIDB/04011/2020 and UIDB/00315/2020. We sincerely appreciate the
valuable comments and suggestions from the editor and reviewers, which helped us improve the quality
of the article.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 30 December 2019
Revised 24 April 2020
7 August 2020
Accepted 1 October 2020
Journal of Intellectual Capital
Vol. 23 No. 2, 2022
pp. 401-419
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-12-2019-0302
be applied in a business context (Sveiby, 1997;Verbano and Crema, 2016). Mart
ın-de-Castro
et al. (2011) point out that the academic debate on intellectual capital remains open and
relevant.
This study focuses on micro, small and medium-sized enterprises (SMEs), which represent
the generality of Portuguese business firms. These firms have specific characteristics that
make them more vulnerable. Their smaller size makes them more exposed to economic, social,
political-legal changes and internal constraints. Specific aspects may boost the performance
of SMEs and it is therefore important to study the impact of intellectual capital on business
performance through a set of mediating variables. Bontis (1998) and Bontis et al. (2000)
present pioneering research on this relationship. Intellectual capital has assumed a strategic
role in SMEs, but traditionally they have had limited resources to use for this purpose
(Ngah and Ibrahim, 2009). Although there are many contributions to the study of the
influence of intellectual capital on business performance in large firms, research on this topic
has been scarce in small firms (Verbano and Crema, 2016).
This research introduces a mediation chain of constructs between intellectual capital and
business performance, which increases the understanding of the causal link between
intellectual capital as a propeller toward better innovation performance and, consequently,
improved business performance. This article is structured in five sections. Following this
introduction, Section 2 introduces the theoretical framework underpinning the study and the
hypotheses to be tested. Section 3 describes the methodology, i.e. scales of measurement, data
collection procedures, characterization of the sample, data analysis (reliability measures and
structural equation models) and control variables. Section 4 presents the results of the data
analysis. The paper concludes with a discussion of research findings, their implications for
management, specific limitations and proposals for future research.
Theoretical framework and hypotheses
The conceptual model underlying this research is depicted in Figure 1. The research
hypotheses discussed below define the relationship between intellectual capital and business
performance through a set of mediators. In particular, absorptive and technological
capabilities are assumed to be antecedents of innovation performance and, consequently, of
business performance.
Intellectual capital
The intellectual capital concept reflects the importance knowledge has acquired over the
firm’s evolution. It is recognized as a strategic factor for higher performance and firms are
assumed to be true “knowledge-creating entities”(Nonaka, 1991). Stewart (1991) defines
intellectual capital as the sum of existing knowledge in the firm. On the other hand,
Bratianu (2018) considers intellectual capital as a nonlinear entity [1]. The creation of
wealth depends on how knowledge is used, which is the responsibility of not only the firm
but of everyone. Hence, the firm’s success depends on how they use knowledge (Fosfuri and
Trib
o, 2008).
Stewart (1991) defines intellectual capital as the total stocks of the collective knowledge,
information, technologies, intellectual property rights, experience, learning and competence,
team communication systems, customer relations and brands that are able to create values
for a firm (see Edvinson and Malone (1997);Sveiby (1997);Edvinson (2000) and Curado and
Bontis (2007)). The literature supports the intellectual capital concept with three interrelated
dimensions: human capital, structural capital and customer capital (Youndt et al., 2004;
Subramaniam and Youndt, 2005)[2]. As a result, the conceptual model assumes a
unidimensional approach to intellectual capital.
JIC
23,2
402
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