The Role of Intellectual Capital-Enhancing HR in Organizational Absorptive Capacity and Innovation

Abstract

This study investigates the role of intellectual capital (i.e., human, social and organization capital) enhancing HR practices in the development of a firm’s potential and realized absorptive capacity, as well as the impact of absorptive capacity on the firm’s innovative performance. Results show that while human capital enhancing HR (acquisition and developmental HR) is positively related to potential absorptive capacity, social capital enhancing HR impacts on potential absorptive capacity through egalitarian practices and realized absorptive capacity through collaborative practices. Organization capital enhancing HR practices contributes to potential, but not realized absorptive capacity. Finally, our findings confirm that innovative performance is driven only by realized absorptive capacity.