Mediation of strategy on intellectual capital and performance

Abstract

Purpose -The purpose of this paper is to explore the mediating effect of business strategy (BS) on intellectual capital (IC) and financial performance (FP). The impact of financial crisis is also a major topic of this research. Design/methodology/approach -This study applies BS as mediator to explore the relationships between IC, BS, and FP. Partial least squares is employed to test the reliability and validity of measurements and the significance of path coefficients, and therefore to examine the hypotheses. Findings -IC has significant impacts on BS and FP in all samples, as well as in those years before and after the financial crisis. BS has a partial significant mediating effect between IC and FP. BS has significant effects on FP in all samples and pre-financial crisis, but has not in post-financial crisis.Research limitations/implications -IC has significant impacts on BS and FP. Moreover, the relationships of IC, BS, and FP are different during pre-and post-financial crisis. The direct effect of IC on FP is confirmed and consistent, and the indirect effect of IC on FP by BS is dependent upon the environment status. Practical implications -Enterprises should pay attention to IC, BS, and the related changes in environment status. These help enterprises develop appropriate strategies, maintain competitive advantage, and upgrade FP. Originality/value -This study applies BS as mediator, and explores the relationships between IC, BS, and FP. The impact of financial crisis is also discussed. The results may serve as the criteria for strategic performance management.

The impact of intellectual capital on performance in Brazilian companies

“…In respect with structural capital, Tseng et al (2013), split structural capital into process capital and innovation capital and the findings show a positive relation between innovation capital and company's performance. Nimtrakoon (2015) discloses a positive and statistically significant relation between structural capital and company's performance.…”

“…In the new economy, intellectual capital is a prominent resource in order to generate wealth and growth, it is also a strong company performance enhancer and a market value booster (Wang & Chang, 2005;Tseng et al, 2013). IC through knowledge management, experience, intellectual property, and information may be used to create wealth, thus becoming vital for organizational performance (Amin & Aslam, 2017).…”

“…Regarding the relation between IC and a company's performance, most studies show a positive and significant impact (Tseng et al, 2013;Nimtrakoon, 2015;Dzenopoljac et al, 2017). Concerning human capital, studies had shown a positive and significant impact of human capital on the company's performance, approached by the operational profit by employee.…”

“…Concerning human capital, studies had shown a positive and significant impact of human capital on the company's performance, approached by the operational profit by employee. Studies found a positive and significant correlation between human capital and overall performance (Tseng et al;Long Kweh, Lu, & Wang, 2014;Morris, 2015;Nimtrakoon, 2015).…”

“…Nimtrakoon (2015) discloses a positive and statistically significant relation between structural capital and company's performance. Tseng et al (2013) utilized a revenue growth rate as an indicator and found a positive relation between client capital and organizational performance and Nimtrakoon (2015) shows a positive and statistically significant correlation between client capital and companies' performance. In short, a number of studies clarify the relationship between IC elements and performance and a growing importance of IC in companies.…”