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

Harcharanjit Singh,Zainab M Aljuboori,Hossam Haddad,Nidal Mahmoud Al-Ramahi,Mostafa A Ali

doi:10.3390/su14010154

Harcharanjit Singh, Zainab M Aljuboori + Show 3 more

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https://doi.org/10.3390/su14010154

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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.v25 and SmartPLS.v3 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.

Highlights

IntroductionSustainability is a business strategy for generating long-term value by considering how a company functions in terms of the environment’s ecological, social, and economic factors
Sustainability is a business strategy for generating long-term value by considering how a company functions in terms of the environment’s ecological, social, and economic factors.Such strategy aims to have a beneficial impact on one or both areas, thereby contributing to solving some of the world’s most ongoing issues
The results showed that the intellectual capitals have a positive influence on firm performance; the evidence is consistent with several studies in Mexico and abroad

Summary

Introduction

Sustainability is a business strategy for generating long-term value by considering how a company functions in terms of the environment’s ecological, social, and economic factors. Such strategy aims to have a beneficial impact on one or both areas, thereby contributing to solving some of the world’s most ongoing issues. Most researchers in the field of intellectual capital have reached a general consensus that intellectual capital provides additional benefits or items that are simple to understand by its employees. In this perception, the present study for the first

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