Abstract:
Purpose
Drawing on the knowledge-based theory of the firm, the study examines the relationship
between each facet of intellectual capital, productivity and firms’ performance and further
investigates, heretofore neglected, a mediating effect of productivity in the relationship
between each facet of intellectual capital and firms’ performance.
Design/methodology/approach
Data were garnered with a self-reported questionnaire from 232 firm managers working in
various industries: banking, insurance, telecommunications and hotels. Reliability and
validity of the instruments were confirmed using confirmatory factor analysis. Prior to
hypothesis testing using structural equation modelling, as a caveat, tests for nonresponse bias
and common method variance were employed.
Findings
The study confirmed that intellectual capital is the pièce de résistance and established a
strong connection with productivity. The results further disclosed a positive relationship
between productivity and firms’ performance. A mediated relationship between individual
facets of intellectual capital and firms’ performance through productivity was also affirmed.
Practical implications
Chiefly, the study underscored the importance of intellectual capital in promoting
productivity and firms’ performance. It behoves human resource managers and practitioners
to make the organisational arrangements to reinforce intellectual capital thereby boosting the
productivity that brings organisations success.
Originality/value
Previous studies in the sphere of intellectual capital have unequivocally discounted in
establishing relationships between intellectual capital, productivity and firms’ performance.
The results of the study are novel findings, unequivocally contributing to the frontiers of the
knowledge-based theory of the firm and conjointly, the study has made methodological and
geographical contributions.
