Intellectual capital as enhancer of product novelty

Abstract

Purpose The purpose of this paper is to theoretically justify the link between the endowment of intellectual capital (IC) and product novelty, and to find empirical evidence for such a link for small and medium-sized enterprises (SMEs) in the Russian business environment. Design/methodology/approach The study implements an intellectual capital-based view and the concept of novelty proposed by Schumpeter to highlight the crucial role of knowledge for transition to a higher level of competition. Drawing on a literature review, the authors determine three specific components of IC: foreign human capital, information and communication technology (ICT) capital developed at an international level and cooperation with foreign partners in order to pinpoint a premier position on the next level of the market. For empirical testing of the proposed model, a data set comprising more than 1,400 Russian manufacturing SMEs was used. Estimations were performed with the help of a principal component analysis and ordinal logistic regression. Findings The findings reveal that higher (IC) endowment promotes the level of product novelty. For Russian manufacturing SMEs, the most important is R&D capital. At the same time, ICT capital developed at an international level and cooperation with foreign partners contribute significantly to the probability of transition to a new market level. Research limitations/implications The study employs cross-sectional data that restrict the analysis of innovation dynamics. Practical implications The study appears to have policy implications for the development of governmental programmes for Russian SMEs such as the creation of IC awareness, training for IC management, special programmes for R&D support and ICT capital accumulation. Originality/value This paper proposes a new approach for investigating the “knowledge-innovation” link, shifting the focus from a general analysis of product innovation to a level of novelty for product innovation. This is the first empirical study of the relationship between IC components and the level of product novelty for SMEs in the context of the Russian business environment.

Intellectual capital, entrepreneurial orientation, and technical innovation in small and medium‐sized enterprises

“…The findings provided important empirical evidence supporting the contention that developing new products/services and processes (i.e., TI) is significantly enhanced through investing in the development and accumulation of knowledge-based assets (i.e., IC;Chen et al, 2007;Wu et al, 2008;Delgado, 2011;Karchegani, Sofian, & Amin, 2013;Al-Khalil et al, 2014;Han & Li, 2015;Dost et al, 2016;Engelman et al, 2017;Molodchik & Jardon, 2017). These results also provide an important theoretical and empirical contribution that adds to TI, EO, and IC literatures, particularly in the context of developing and emerging "knowledge-based" economies.…”

“…In doing so, STC facilitates the integration of new knowledge into the firm's existing knowledge repertoire and is reflected in a firm's organizational structure, culture, managerial systems, manuals, databases, routines and procedures, patents, and other forms of Intellectual Property Rights (Dost et al, 2016;Jashapara, 2011). It is in this way that STC influences TI as it articulates and manifests the intellectual output of its members and readies it for subsequent use and utilization in innovation activities (Danish et al, 2016;Jashapara, 2011;Molodchik & Jardon, 2017). Based on the preceding discussion, it is hypothesized that…”

“…1997; Bontis, 1998Bontis, , 1999Bontis, Chua Chong Keow, & Richardson, 2000;Sanchez & Olea, 2000;Andriessen, 2004;Youndt, Subramaniam, & Snell, 2004;Subramaniam & Youndt, 2005;Seleim & Khalil, 2011;Khalique et al, 2011;Danish et al, 2016;Dost, Badir, Ali, & Tariq, 2016;Molodchik & Jardon, 2017;Ramadan, Dahiyat, Bontis, & Al-dalahmeh, 2017).…”

“…As has already been mentioned that there has been a considerable amount of academic research examining the direct effect of IC on TI, the extant literature has shown a clear interconnectedness between both constructs in numerous industries (e.g., Subramaniam & Youndt, 2005;Wu, Chang, & Chen, 2008;Marvel & Lumpkin, 2007;Schiuma & Lerro, 2008;Rhee et al, 2010;Martín-de-Castro et al, 2011;Seleim & Khalil, 2011;Al-Khalil, Dahiyat, & Al-Dalahmeh, 2014;Dost et al, 2016;Danish et al, 2016;Engelman et al, 2017;Molodchik & Jardon, 2017;Mitrega, Forkmann, Zaefarian, & Henneberg, 2017). However, this research program has generally not explored the existence of other factors exerting a potentially mediating effect upon the relationship between IC dimensions and TI.…”

“…Based on feedback gathered from the refereeing phase, a final copy of the questionnaire was prepared and used for primary data collection. Thus, both face and content validity were checked and established.Exploratory factor analysis (EFA) employing principal component analysis with varimax rotation was conducted to assess construct validity and the unidimensionality of the measurements, which is consistent with many studies in the areas of IC and TI (e.g.,Dost et al, 2016;Engelman et al, 2017;Field, 2009;Hair, Black, Babin, Anderson, & Tatham, 1998;Han & Li, 2015;Martín-de-Castro et al, 2011;Mitrega et al, 2017;Molodchik & Jardon, 2017;Ramadan et al,…”