Intellectual capital in action: evidence from Italian local governments

Abstract

Purpose Intellectual capital (IC) is attracting increasing attention from scholars and practitioners in the private sector, while research in the public sector is still in its embryonic stage, especially in regards to local governments. The purpose of this paper is to fill this gap by channelling conceptual and empirical findings from the large body of IC literature. Design/methodology/approach The research investigates IC in action in the local government domain. A survey has been carried out involving both managers and politicians of all Italian local governments (ILGs) with more than 40,000 inhabitants. In order to define the constituents of each IC dimension perceived by ILGs, principal component analysis was used in investigating the results. Findings Results highlights how IC components are perceived in ILGs: human capital is a combination of aptitudes in pursuing target performances, sense of ownership and motivations; relational capital is a combination of values, relationships and acts; structural capital includes procedures and routines supporting the decision-making process, the ability of achieving objectives and handling changes. Research limitations/implications While the research findings are limited due to being based on a survey in a single country, they present opportunities for future research regarding further testing of how IC is perceived in LGs in different context. The conclusion could be beneficial also for standard setters, providing a path to support the IC disclosure by LGs. Originality/value The paper contributes to a narrow strand of research – IC in LGs – adding new knowledge in “IC in action” research stream.