Knowledge quality and non‐financial performance—A Malaysian experience

Abstract

AbstractThis paper proposes a framework that investigates the impact of knowledge quality on innovation in Malaysian manufacturing firms. It explores the effect of innovation on non‐financial performance (learning and growth; internal processes) of Malaysian manufacturing companies. Three hundred eighty‐eight questionnaires were collected from middle and top engineers, managers, and technicians and were used to conduct the analyses. Structural equation modeling (SEM) is used for testing the developed hypotheses. The result of analyses confirmed the impact of determinants (absorptive capacity, functional diversity, and knowledge network) on knowledge quality. This study also confirmed that knowledge quality has a significant impact on innovation, while innovation has a significant effect on non‐financial performance. This paper also revealed that knowledge quality determinants have a significant influence on the non‐financial performance of manufacturing firms in Malaysia. The present study examined the relationship between these factors (related to internal and external knowledge), knowledge quality, innovation, and non‐financial performance (internal process and learning and growth) in the manufacturing companies of Malaysia.