The use of intellectual capital to obtain competitive advantages in regional small and medium enterprises

Does Intellectual Capital Affect Financial Leverage of Chinese Agricultural Companies? Exploring the Role of Firm Profitability

The objective of this paper is to examine the relationship between intellectual capital (IC) and firms’ financial leverage by exploring whether firm profitability mediates this relationship, using a dataset of Chinese agricultural listed companies during the period of 2014–2020. Financial leverage is measured by the debt-to-asset ratio, and IC is measured via the modified value-added intellectual coefficient (MVAIC) model. The results reveal that financial leverage is lower in firms with higher levels of IC, and IC positively affects firm profitability. In addition, firm profitability partially mediates the relationship between IC and financial leverage. When MVAIC is disaggregated into its four components, firm profitability has a partially mediating effect on the relationship between physical and human capitals and financial leverage. This paper might provide corporate managers with a clear understanding of IC’s impact on firm indebtedness.

From knowledge management to organizational performance

Purpose

The purpose of this paper is to empirically investigate the effects of knowledge management (KM) enablers on KM processes in research universities and testing the direct relation between KM processes and OP. This study also proposes to examine the mediating role of intellectual capital (IC) and innovation in the relationship between KM processes and performance of universities.

Design/methodology/approach

Using a sample of 217 academic and administrative personnel from research universities of Pakistan, the hypothesized relationships were tested through partial least squares structural equation modeling technique.

Findings

The results reveal that KM enablers have a significant impact on KM processes. The results also indicate that KM processes influence organizational performance (OP) directly and indirectly through innovation and IC.

Practical implications

Findings of this study reinforce the corporate experience of KM and suggest how administrators of research universities and higher educational institutions can promote innovation and IC, which in turn enhance OP.

Originality/value

Despite the augmented importance of KM in higher education institutions or research universities, there is a dearth of studies that investigate the interplay of KM, innovation, IC and OP. This is one of the earliest studies that not only empirically investigate the interaction of KM enablers, KM processes and performance of research universities but also shed insights into the existing literature by simultaneously investigating mediating role of IC and innovation in the underlying relationship.

Tips to use partial least squares structural equation modelling (PLS-SEM) in knowledge management

Purpose

Structural equation modelling (SEM) has been defined as the combination of latent variables and structural relationships. The partial least squares SEM (PLS-SEM) is used to estimate complex cause-effect relationship models with latent variables as the most salient research methods across a variety of disciplines, including knowledge management (KM). Following the path initiated by different domains in business research, this paper aims to examine how PLS-SEM has been applied in KM research, also providing some new guidelines how to improve PLS-SEM report analysis.

Design/methodology/approach

To ensure an objective way to analyse relevant works in the field of KM, this study conducted a systematic literature review of 63 publications in three SSCI-indexed and specific KM journals between 2015 and 2017.

Findings

Our results show that over the past three years, a significant amount of KM works has empirically used PLS-SEM. The findings also suggest that in light of recent developments of PLS-SEM reporting, some common misconceptions among KM researchers occurred mainly related to the reasons for using PLS-SEM, the purposes of PLS-SEM analysis, data characteristics, model characteristics and the evaluation of the structural models.

Originality/value

This study contributes to that vast KM literature by documenting the PLS-SEM-related problems and misconceptions. Therefore, it will shed light for better reports in PLS-SEM studies in the KM field.

The effects of knowledge creation process on organizational performance using the BSC approach: the mediating role of intellectual capital

Purpose

Knowledge is a key success factor in achieving competitive advantage in the current fast-paced and uncertain economic environment. Several studies in the literature have analyzed the relationship between knowledge creation (KC) and organizational success; however, the mechanisms by which KC leads to accumulation of intellectual capital (IC) and thereby affects various dimensions of organizational performance are understudied. The purpose of this paper is to examine how KC and IC and their relationship influence key dimensions of organizational performance.

Design/methodology/approach

A research model was developed and tested based on the literature in the areas of KC, IC and organizational performance. This study uses a survey sent to companies in an intensive knowledge-based industry. The balanced scorecard (BSC) approach was used to measure the key dimensions of organizational performance.

Findings

The results from structural equation modeling (SEM) on 470 completed questionnaires received from the pharmaceutical companies in Iran reveal that KC activities lead to the accumulation of organizational IC and IC has a crucial and positive impact on the BSC. Furthermore, the results from the path analysis indicate that IC mediates the effects of KC on the BSC.

Practical implications

The findings of this study contribute to the extant literature on the relationship between knowledge and organizational performance by demonstrating that knowledge and KC lead to performance when organizations utilize KC activities and leverage them to accumulate IC. Once used effectively, IC will result in a better performance in the knowledge-intensive environments.

Originality/value

This is the first study that investigates how KC contributes to firm performance by incorporating the mediating impact of IC on the BSC. The proposed model and results will help organizations to identify the mechanisms through which KC initiatives improve organizational performance.