Intellectual Capital and Firm Performance Correlation: The Mediation Role of Innovation Capability in Malaysian Manufacturing SMEs Perspective

Zainab M. Aljuboori, Harcharanjit Singh, Hossam Haddad, Nidal Mahmoud Al-Ramahi and Mostafa A. Ali
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Zainab M. Aljuboori: Azman Hashim International Business School, Universiti Teknologi Malaysia, Kuala Lumpur 54100, Malaysia
Harcharanjit Singh: Azman Hashim International Business School, Universiti Teknologi Malaysia, Kuala Lumpur 54100, Malaysia
Hossam Haddad: Business Faculty, Middle East University, Amman 11831, Jordan
Nidal Mahmoud Al-Ramahi: Business Faculty, Zarqa University, Zarqa 11831, Jordan
Mostafa A. Ali: Azman Hashim International Business School, Universiti Teknologi Malaysia, Kuala Lumpur 54100, Malaysia

Sustainability, 2021, vol. 14, issue 1, 1-27

Abstract: Understanding of intellectual capital’s influence on the firm performance has received immense interest in recent years. In this view, the impact of various intellectual capital components, including human, structural, and relational capital, on the performance of small- and medium-sized Malaysian manufacturing enterprises were examined. A correlation between intellectual capital and firm performance were established based on the mediating role of innovation capability. To achieve this goal, a stratified sampling method was used wherein 262 participants’ responses from the focused manufacturing firms were obtained and analyzed via the structural equation model (SEM) and resource-based view (RBV). Statistical tools like SPSS.v 25 and SmartPLS.v 3 were used. The results showed that the relationship between intellectual capital and firm performance was strengthened due to the mediation of innovation capability, thereby gaining higher competitive advantages. It was asserted that the present comprehensive analyses may offer a useful information and guidance to the academics, owners/managers, and policymakers involving the impact of intellectual capital development towards improving the Malaysian SMEs performance.

Keywords: human capital; structural capital; relational capital; innovation capability; firm performance; SMEs (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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