Knowledge-enhancing HR practices and sustainable competitive advantage: the mediating role of intellectual capital in knowledge-based firms

PurposeThe purpose of this paper is to examine the relationship between knowledge-enhancing HR practices, intellectual capital and sustainable competitive advantage in knowledge-based firms.Design/methodology/approachA quantitative approach was used to conduct the present study. The respondents were sampled from knowledge-based firms in Iran. Overall, 320 managers in 157 firms were selected using convenience sampling. A structural equation model was employed for testing the hypotheses.FindingsThe study confirmed that knowledge-enhancing human resource (HR) practices established a very strong connection with intellectual capital. The results further disclosed a positive relationship between intellectual capital and firms' competitive advantage. A mediated relationship between knowledge-enhancing HR practices and firms' competitive advantage through intellectual capital was also affirmed.Research limitations/implicationsThe study was conducted in knowledge-based firms in Iran, which limits the generalizability of the research findings. Therefore, future studies should be carried out with samples from other contexts. Moreover, as the study was cross-sectional, the causal relationships could not be inferred directly.Practical implicationsThe paper underscored the importance of intellectual capital in improving knowledge-enhancing HR practices and firms' competitive advantage. It suggests to human resource managers to make the organizational arrangements to design knowledge-enhancing HR practices, thereby developing the intellectual capital that brings competitive advantage to knowledge-based firms.Originality/valueThe results of this study contribute to advance research on the intellectual capital literature by trying to explain how intellectual capital as a mediator variable can influence the relationship between knowledge-enhancing HR practices and sustainable competitive advantage.