Intellectual capital, corporate social responsibility and sustainable competitive performance of small and medium-sized enterprises: mediating effects of organizational innovation

Abstract

PurposeThis study aims to explore the mechanism by which intellectual capital and corporate social responsibility (CSR) influence the sustainable competitive performance of small and medium-sized enterprises (SMEs), with the mediating role of organizational innovation in an emerging economy.Design/methodology/approachThe data collection was conducted through a survey completed by 208 owners and top managers operating in the service, trading and manufacturing sector SMEs, positioned within twin cities of Pakistan. Structural equation modeling (SEM) was utilized for data analysis.FindingsThe results of the study suggest that intellectual capital and CSR have a markedly positive influence on the sustainable competitive performance of SMEs. The organizational innovation appears to mediate these relationships.Originality/valueThis study pioneers research on the links between intellectual capital, CSR organizational innovation and sustainable competitive performance of SMEs. The current research contributes to the literature by defining intellectual capital and CSR as an antecedent and organizational innovation as an intervening variable for the sustainable competitive performance of SMEs. In addition, this study underlines the significance of intellectual capital and CSR activities as valuable intangible assets for the achievement of sustainable competitive performance of SMEs.

Intellectual Capital and Financial Performance: The Mediating Effect of Sustainability Performance

“…Therefore, SMEs with good social and environmental programs gain a positive reputation in the market, ultimately improving their financial performance (Agyemang & Ansong, 2017). This result supports previous studies that found a positive relationship between social and environmental responsibility practices and the financial performance of SMEs (Ahmad et al, 2022;Bahta et al, 2021;Bartolacci et al, 2020).…”

“…In developing countries, concern for the environment also opens up opportunities for SMEs to win more contracts, especially with customers who are aware of the environment (Ikram et al, 2020). Previous studies have also confirmed a positive relationship between social and environmental responsibility practices and the financial performance of SMEs (Ahmad et al, 2022;Bahta et al, 2021;Bartolacci, Caputo, & Soverchia, 2020). Thus, the third hypothesis is formulated as follows:…”

“…Thus, IC creates creativity and productivity and improves performance. Previous evidence has shown that IC positively influences SMEs' performance (Ahmad, Wu, & Khattak, 2022;Crema & Verbano, 2016). Thus, the first hypothesis is formulated as follows:…”

“…Relational capital also plays a role in positioning social and environmental programs to increase the reputation and value of the organization Meanwhile, structural capital helps provide the infrastructure for sustainability programs to increase the organization's competitiveness and market share (Alvino et al, 2021;Benevene, Buonomo, Kong, Pansini, & Farnese, 2021). Several studies have shown that IC encourages SMEs toward more sustainable performance, aligning with the Sustainable Development Goals (SDGs) (Ahmad et al, 2022;Alvino et al, 2021;Khan et al, 2021;Yusliza et al, 2020). Thus, the second hypothesis is formulated as follows:…”

Disentangling the impact of ICT adoption on SMEs performance: the mediating roles of corporate social responsibility and innovation

“…On the basis of the above, in the relationship between CSR and performance, the mediating role of innovation is obvious. The links between CSR and company performance are explained by intangible resources, which include innovation (Ahmad et al, 2022). For companies to increase their performance, they need the capabilities that innovation brings to them (El-Gammal et al, 2018).…”