Competitive advantage: mediator of intellectual capital and performance

Abstract

Purpose -The purpose of this paper is to examine the mediating effect of competitive advantage in the relationship between intellectual capital and financial performance in Uganda's microfinance institutions. The major aim is to establish the role of competitive advantage in the relationship between intellectual capital and firm performance. Design/methodology/approach -The paper adopts MedGraph program (Excel version), Sobel tests and the Kenny and Boran approach to test for mediation effects. Findings -Competitive advantage is a significant mediator in the association between intellectual capital and financial performance and boosts the relationship between the two by 22.4 percent in Ugandan microfinance institutions. Further findings confirmed a partial type of mediation between the intellectual capital, competitive advantage and financial performance. Research limitations/implications -Only a single research methodological approach was employed and future research through interviews could be undertaken to triangulate. Furthermore, the findings from the present study are cross-sectional. Future research should be undertaken to examine the mediation effects studied in this paper across time. Practical implications -In order to have a meaningful interpretation of the results of the relationships between study variables, it is always vital to assess the role of the third variable (competitive advantage) in the relationship. This enables practitioners and scholars to comprehend and make legitimate decisions and conclusions that can foster business growth. Originality/value -This is the first study that focuses on testing the mediating effect of competitive advantage on the relationship between intellectual capital and financial performance in Ugandan microfinance institutions.

The Impact of Intellectual Capital on Firm Financial Performance by Moderating of Dynamic Capability

“…Second, developing and emerging economics are mostly based on physical assets and tend to neglect the intangible assets, thus, it seems logical for VAIC researches to fail to explain a positive association among firm value and IC. Third, according to Hsu and Fang (2009), Kamukama et al (2011), andChen et al (2006) the effect of IC on performance will be significant with applying the third variable as moderator or mediator variables.…”

“…10, No. 17;2014 researchs by Hsu and Fang (2009), Kamukama et al (2011), andChen et al (2006) in positive effect of applying moderator or mediator variable in association among IC and performance.…”

“…Some previous researchers such as Hsu and Fang (2009), Kamukama et al (2011), andChen et al (2006) believed in the need to employ a moderating or mediating variable on the association among VAIC and financial performance. For example, Kamukama et al (2011) used competitive advantage as a mediating variable on the relationship among IC and firm performance.…”

“…For example, Kamukama et al (2011) used competitive advantage as a mediating variable on the relationship among IC and firm performance. The result of the research showed that the relationship was significantly mediated by competitive advantage.…”

Competitive Advantage: Mediator of Diversification and Performance

“…It can be defined that relates to human capital that can improve corporate sustainability performance. As stated by [33], that competitive advantage can improve competitive advantage if it is supported by human capital.…”