The role of intellectual capital on process and products innovation. Empirical study in SMEs in an emerging country
| DOI | https://doi.org/10.1108/JIC-07-2020-0234 |
| Published date | 10 February 2021 |
| Date | 10 February 2021 |
| Pages | 741-764 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Nicolas Salvador Beltramino,Domingo Garcia-Perez-de-Lema,Luis Enrique Valdez-Juarez |
The role of intellectual capital on
process and products innovation.
Empirical study in SMEs in an
emerging country
Nicolas Salvador Beltramino
Facultad de Ciencias Economicas, Universidad Nacional de Cordoba, Cordoba,
Argentina and Universidad Nacional de Villa Maria, Villa Maria, Argentina
Domingo Garcia-Perez-de-Lema
Universidad Politecnica de Cartagena, Cartagena, Spain, and
Luis Enrique Valdez-Juarez
Instituto Tecnologico de Sonora, Guaymas, Mexico
Abstract
Purpose –The objective of this study is to analyze the influence of the intellectual capital of SMEs on
innovation and organizational performance in the context of an emerging country.
Design/methodology/approach –The sample consisted of 259 industrial SMEs from the Cordoba,
Argentina. The data were analyzed by partial least squares–structural equation modeling (PLS–SEM).
Findings –The study provides empirical evidence that the three components of intellectual capital generate
positive and significant effects on innovation in processes and products. Structural capital is the component
that has the greatest effect on innovation. It also showed a positive and significant relationship between
innovation in processes andperformance, contributing to the scarce empirical literature in the context of SMEs.
Research limitations/implications–The research exposes limitations that uncover a path for future. First,
the work uses as the only source of information, the consultation at the highest level of the company. Second,
the study covered only industrial companies. Future studies should focus on other sectors and countries.
Practical implications –The results may have important practical implications for SME owners and
managers and offer a vision of the influence of intellectual capital on the innovative capacity of the
organization.
Originality/value –The value of work lies in establishing the importance of intellectual capital in the
environment of an emerging country such as Argentina, given the low level of knowledge that exists in
this area.
Keywords Process innovation, Product innovation, Performance, Intellectual capital
Paper type Research paper
1. Introduction
Intellectual capital is key to promoting the competitiveness of companies and is seen by
researchers and professionals as an important research topic (Crema and Verbano, 2016;
Khalique et al.,2019). The literature on intellectual capital management determines that it
is a critical resource for the creation of knowledge because it is an important generator of
competitive advantages (Grant, 1996). Intellectual capital is based on theories of
intellectual capital and resources and capabilities, which indicate that intangible
resources are capable of generating sustainable competitive advantages over time and
thus create greater value for the company (Jard
on and Martos, 2012). Intellectualcapital is
a source of creativity and innovation for companies (Abualoush et al.,2018)andis
increasingly important in a globalized environment, where innovation is crucial, since the
demand for products and services based on knowledge is increasing (Harrington et al.,
2019;Rodriguez-Vaz and Selig, 2019). Intellectual capital is allowing managers to change
IC in SMEs in
an emerging
country
741
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 15 July 2020
Revised 28 October 2020
Accepted 18 January 2021
Journal of Intellectual Capital
Vol. 23 No. 4, 2022
pp. 741-764
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-07-2020-0234
their strategic focus in order to exploit their dynamic and intangible intellectual assets
(Tseng and James-Goo, 2005).
The literature that analyzes the relationships between the components of intellectual
capital, innovation and company performance is extensive (Agostini et al., 2017;Bontis et al.,
2018;Santos-Rodrigues et al., 2011;Subramaniam and Venkatraman, 2001;Subramaniam
and Youndt, 2005). Intellectual capital is increasingly recognized as an important source of
value creation (Curado et al., 2011;Agostini et al., 2017). Although there have been important
contributions in this area, a large part of the studies has dealt with the effect of intellectual
capital on the growth and value generation of companies and, to a lesser extent, in the
particular context of SMEs, but there exists the need for more quantitative studies that
contribute to improving the knowledge of the relationship between intellectual capital and the
innovation capacities of SMEs (Ruiz-Jim
enez and Fuentes-Fuentes, 2018;Agostini and
Nosella, 2017).
The purpose of our study is to analyze the effect of intellectual capital (human capital,
structural capital and relational capital) on the activity of innovation and the performance of
SMEs. For this, an empirical study is carried out on a sample of 259 industrial SME
companies in the province of C
ordoba, Argentina, which have between 10 and 200 workers.
The survey is carried out with the owner / manager of the company, who are usually the
leader and manager of the company (Jardon, 2019). In SMEs in contexts of emerging
economies, the leadership of the manager / owners plays a decisive role for the development of
innovation and performance (Afriyie et al., 2019). The research questions to be answered are
as follows. Does intellectual capital significantly affect product and process innovation in
SMEs? What factors of intellectual capital have the greatest impact on innovation? Do
product and process innovation have significant effects on the performance of SMEs? The
answer to these questions has important implications, both for SME management and for
academia, since there is a close relationship between intellectual capital and innovative
activity of companies (Crema and Verbano, 2016;Santos-Rodrigues et al., 2011). Argentina is
an especially interesting emerging country because industrial SMEs are a fundamental part
of its business. In the province of C
ordoba, Argentina, together they represent 68% of the
total number of positions filled (OIR, 2017) and, together with Santa Fe and Buenos Aires,
they represent 72% of the country’s industrial activity (Uni
on Industrial, 2017). Currently, the
country is undergoing a major restructuring toward a change in its production system in
order to reduce the worrying failure rates of SMEs, since 97% do not reach the fifth year, a
figure much higher than in other countries (Lagunes-Dom
ınguez et al., 2016).
The present investigation contributes to the literature in different aspects. First, it
provides a comprehensive approach where intellectual capital is analyzed in a context of an
emerging country. It is important to contextual innovation in the field of emerging markets.
The literature in this field of research is very scarce and can be used by the leader and
managers who work in the SMEs to be more competitive (Singh and Gaur, 2018). These
markets are characterized by their relatively low levels of innovation (Heredia-P
erez et al.,
2019), clients are more sensitive to prices (Derbyshire, 2014) and institutions play a very
important role in their strategic processes (Stock et al., 2002). Although there are studies in
other emerging regions (Khalique et al., 2019), there are still very incipient studies in the
reality of Argentina, which has characteristics that make the study of intellectual capital in
this region interesting (Fern
andez-Jard
on and Martos, 2016). Secondly, our work contributes
to the literature showing how, through an intellectual capital strategy, SMEs can increase
their capacities for innovation in processes and products. In particular, the results show that
the component of intellectual capital that has the greatest impact on product and process
innovation is structural capital. This finding provides important implications and allows
SMEs to promote intellectual capital policies that favor a competitive advantage. Companies
gain a competitive advantage if they know how to manage organizational knowledge (Schulz
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