Intellectual capital and innovative performance: a mediation-moderation perspective

Purpose This study explores central questions related to the connection between intellectual capital (IC) and the innovative performance of organizations through the mediating role of management control systems (MCS) and business strategies, as well as the moderating role of innovation capabilities. Design/methodology/approach The data was collected from the managers of small and medium enterprises (SMEs) through a structured questionnaire. Out of 1,152 questionnaires distributed, only 415 were used for analysis purposes. Structural equation modelling (SEM) was used to test the study hypotheses. Findings Intellectual capital significantly influences MCS, business strategies and innovative performance. Moreover, MCS, business strategies and innovative capabilities significantly improve innovative performance. MCS and business strategies significantly mediate the relationship between intellectual capital and innovative performance. Finally, innovative capabilities significantly moderate that between intellectual capital and innovative performance. Practical implications The current research examines how management should use MCS, business strategies, and innovative capabilities to take maximum benefit from intellectual capital in order to improve innovative performance. Originality/value This is pioneering research that develops a theoretical model to incorporate intellectual capital, MCS, business strategies, innovative capabilities and innovative performance. Even though the influence of various kinds of intangible assets/resources on innovative performance has been widely examined in the literature, scant attention has been paid to the role of MCS, business strategies, and innovative capabilities in leveraging the firm's intellectual capital.