IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i19p5328-d271134.html
   My bibliography  Save this article

Intellectual Capital, Technological Innovation and Firm Performance: Evidence from China’s Manufacturing Sector

Author

Listed:
  • Jian Xu

    (School of Management, Qingdao Agricultural University, Qingdao 266109, China)

  • Yue Shang

    (Business College, Yantai Nanshan University, Yantai 265713, China)

  • Weizhen Yu

    (School of Management, Zhejiang Shuren University, Hangzhou 310015, China
    Zhejiang Modern Service Industry Research Center, Hangzhou 310015, China)

  • Feng Liu

    (Korea University Business School, Korea University, Seoul 02841, Korea)

Abstract

Intellectual capital (IC) is considered to be a main driver of organizational success in the knowledge economy. This study examines the impacts of three IC components, including human capital (HC), structural capital (SC), and relational capital (RC), on technological innovation and firm performance. Data are collected from 1112 manufacturing listed companies in China during 2013–17. Using partial least squares structural equation modeling (PLS-SEM), the results show that HC and SC exert a positive impact on firm performance while RC has a negative impact; SC has a positive influence on technological innovation while HC has a negative influence; technological innovation can enhance the firm’s performance. In addition, technological innovation partially mediates the relationship between SC and firm performance. This study will bridge the gap in research by investigating the impacts of IC components on technological innovation and firm performance in developing countries.

Suggested Citation

  • Jian Xu & Yue Shang & Weizhen Yu & Feng Liu, 2019. "Intellectual Capital, Technological Innovation and Firm Performance: Evidence from China’s Manufacturing Sector," Sustainability, MDPI, vol. 11(19), pages 1-16, September.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:19:p:5328-:d:271134
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/19/5328/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/19/5328/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Karl-Heinz Leitner, 2015. "INTELLECTUAL CAPITAL, INNOVATION, AND PERFORMANCE: EMPIRICAL EVIDENCE FROM SMEs," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 19(05), pages 1-27.
    2. Stephen Gates & Pascal Langevin, 2010. "Human capital measures, strategy, and performance: HR managers' perceptions," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 23(1), pages 111-132, January.
    3. Tsuneo Nakahara, 2001. "Innovation management using intellectual capital," International Journal of Entrepreneurship and Innovation Management, Inderscience Enterprises Ltd, vol. 1(1), pages 96-110.
    4. Namchul Shin & Kenneth Kraemer & Jason Dedrick, 2009. "R&D, Value Chain Location and Firm Performance in the Global Electronics Industry," Industry and Innovation, Taylor & Francis Journals, vol. 16(3), pages 315-330.
    5. Jian Xu & Binghan Wang, 2018. "Intellectual Capital, Financial Performance and Companies’ Sustainable Growth: Evidence from the Korean Manufacturing Industry," Sustainability, MDPI, vol. 10(12), pages 1-15, December.
    6. Ramadani, Veland & Hisrich, Robert D. & Abazi-Alili, Hyrije & Dana, Léo-Paul & Panthi, Laxman & Abazi-Bexheti, Lejla, 2019. "Product innovation and firm performance in transition economies: A multi-stage estimation approach," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 271-280.
    7. David J. Teece, 2008. "Firm organization, industrial structure, and technological innovation," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 11, pages 265-296, World Scientific Publishing Co. Pte. Ltd..
    8. Kianto, Aino & Sáenz, Josune & Aramburu, Nekane, 2017. "Knowledge-based human resource management practices, intellectual capital and innovation," Journal of Business Research, Elsevier, vol. 81(C), pages 11-20.
    9. Derek Bosworth & Mark Rogers, 2001. "Market Value, R&D and Intellectual Property: An Empirical Analysis of Large Australian Firms," The Economic Record, The Economic Society of Australia, vol. 77(239), pages 323-337, December.
    10. Trilochan Tripathy & Luis A. Gil-Alana & Debadutta Sahoo, 2015. "The effect of intellectual capital on firms' financial performance: an empirical investigation in India," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 12(4), pages 342-371.
    11. Stephen Gates & Pascal Langevin, 2010. "Human capital measures, strategy, and performance : HR managers' perceptions," Post-Print hal-02312507, HAL.
    12. Aristides Isidoro Ferreira & Luís Fructuoso Martinez, 2011. "Intellectual capital: perceptions of productivity a and investment," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 15(2), pages 249-260.
    13. Martín-de Castro, Gregorio & Delgado-Verde, Miriam & Navas-López, José E. & Cruz-González, Jorge, 2013. "The moderating role of innovation culture in the relationship between knowledge assets and product innovation," Technological Forecasting and Social Change, Elsevier, vol. 80(2), pages 351-363.
    14. Stephen Gates & Pascal Langevin, 2010. "Human capital measures, strategy, and performance : HR managers' perceptions," Post-Print hal-02276733, HAL.
    15. repec:bla:ecorec:v:77:y:2001:i:239:p:323-37 is not listed on IDEAS
    16. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    17. Wendy Green & Robert Czernkowski & Yi Wang, 2009. "Special treatment regulation in China: potential unintended consequences," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 17(3), pages 198-211, September.
    18. Stephen Gates & Pascal Langevin, 2010. "Human capital measures, strategy and performance: HR managers' perceptions," Post-Print hal-00771144, HAL.
    19. Margaret A. Peteraf & Jay B. Barney, 2003. "Unraveling the resource-based tangle," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 24(4), pages 309-323.
    20. Lee, Ryeowon & Lee, Jong-Ho & Garrett, Tony C., 2019. "Synergy effects of innovation on firm performance," Journal of Business Research, Elsevier, vol. 99(C), pages 507-515.
    21. Roper, Stephen & Du, Jun & Love, James H., 2008. "Modelling the innovation value chain," Research Policy, Elsevier, vol. 37(6-7), pages 961-977, July.
    22. Chandan Sharma, 2012. "R&D and firm performance: evidence from the Indian pharmaceutical industry," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 17(2), pages 332-342.
    23. Yam, Richard C.M. & Lo, William & Tang, Esther P.Y. & Lau, Antonio K.W., 2011. "Analysis of sources of innovation, technological innovation capabilities, and performance: An empirical study of Hong Kong manufacturing industries," Research Policy, Elsevier, vol. 40(3), pages 391-402, April.
    24. Shahid Amin & Shoaib Aslam, 2017. "Intellectual Capital, Innovation and Firm Performance of Pharmaceuticals: A Study of the London Stock Exchange," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 16(02), pages 1-20, June.
    25. Trilochan Tripathy & Ashok Kumar Sar & Debadatta Sahoo, 2014. "The Effect of Intellectual Capital on Firms’ Valuation: An Empirical Investigation with Reference to India," The IUP Journal of Applied Economics, IUP Publications, vol. 0(3), pages 45-68, July.
    26. Vo, Duc, 2018. "Should Bankers Be Concerned with Intellectual Capital? A Study of the Thai Banking Sector," MPRA Paper 103275, University Library of Munich, Germany.
    27. Jian Xu & Jae Woo Sim, 2017. "Are costs really sticky and biased? Evidence from manufacturing listed companies in China," Applied Economics, Taylor & Francis Journals, vol. 49(55), pages 5601-5613, November.
    28. Muhammad Nadeem & John Dumay & Maurizio Massaro, 2019. "If You Can Measure It, You Can Manage It: A Case of Intellectual Capital," Australian Accounting Review, CPA Australia, vol. 29(2), pages 395-407, June.
    29. Jian Xu & Binghan Wang, 2019. "Intellectual Capital Performance of the Textile Industry in Emerging Markets: A Comparison with China and South Korea," Sustainability, MDPI, vol. 11(8), pages 1-16, April.
    30. Muhammad Haris & HongXing Yao & Gulzara Tariq & Ali Malik & Hafiz Mustansar Javaid, 2019. "Intellectual Capital Performance and Profitability of Banks: Evidence from Pakistan," JRFM, MDPI, vol. 12(2), pages 1-26, April.
    31. McDowell, William C. & Peake, Whitney O. & Coder, LeAnne & Harris, Michael L., 2018. "Building small firm performance through intellectual capital development: Exploring innovation as the “black box”," Journal of Business Research, Elsevier, vol. 88(C), pages 321-327.
    32. Vivien E. Jancenelle & Susan Storrud-Barnes & Rajshekhar (Raj) G. Javalgi, 2017. "Corporate entrepreneurship and market performance," Management Research Review, Emerald Group Publishing Limited, vol. 40(3), pages 352-367, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wei-han Liu & Qian Long Kweh, 2022. "Reexamining nonlinear effects of intellectual capital on firm efficiency," Annals of Operations Research, Springer, vol. 315(2), pages 1319-1344, August.
    2. Keonhyeong Lee & Liyuan Wang, 2023. "Chinese High-Tech Export Performance: Effects of Intellectual Capital Mediated by Dynamic and Risk Management Capabilities," SAGE Open, , vol. 13(1), pages 21582440231, February.
    3. Farzaneh, Mandana & Wilden, Ralf & Afshari, Leila & Mehralian, Gholamhossein, 2022. "Dynamic capabilities and innovation ambidexterity: The roles of intellectual capital and innovation orientation," Journal of Business Research, Elsevier, vol. 148(C), pages 47-59.
    4. Salman Ali & Guihua Li & Ping Yang & Kramat Hussain & Yousaf Latif, 2020. "Unpacking the importance of intangible skills in new product development and sustainable business performance; strategies for marketing managers," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-26, September.
    5. Defang Ma & Liangwei Li & Yuxi Song & Mengkai Wang & Qiaowen Han, 2023. "Corporate Sustainability: The Impact of Environmental, Social, and Governance Performance on Corporate Development and Innovation," Sustainability, MDPI, vol. 15(19), pages 1-16, September.
    6. Ahmad Suffian Mohd Zahari & Rosman Mahmood & Zuriyati Ahmad & Azzri Fazril Rosman, 2024. "Religious Practices Position in Firm Performance: A Case of the Malaysian Construction Industry," Information Management and Business Review, AMH International, vol. 16(1), pages 239-251.
    7. Nazir, Sajid & Ali, Mahmood & Saeed, Munazza & Mubarik, Muhammad Shahzad & Jalil, Qasim, 2024. "Sustainable performance and disaster management in the oil and gas industry: An intellectual capital perspective," Resources Policy, Elsevier, vol. 92(C).
    8. Guangchun Jin & Jian Xu, 2022. "Does Intellectual Capital Affect Financial Leverage of Chinese Agricultural Companies? Exploring the Role of Firm Profitability," Sustainability, MDPI, vol. 14(5), pages 1-14, February.
    9. Xin Long Xu & Jianping Li & Dengsheng Wu & Xi Zhang, 2021. "The intellectual capital efficiency and corporate sustainable growth nexus: comparison from agriculture, tourism and renewable energy sector," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(11), pages 16038-16056, November.
    10. Andrés Camacho, 2020. "The role of science-oriented workers on innovation: the case of the accommodation industry in Colombia," Documentos de Trabajo UEC 19547, Universidad Externado de Colombia.
    11. Yizhou Chu & Maomao Chi & Weijun Wang & Bo Luo, 2019. "The Impact of Information Technology Capabilities of Manufacturing Enterprises on Innovation Performance: Evidences from SEM and fsQCA," Sustainability, MDPI, vol. 11(21), pages 1-17, October.
    12. Xin Long Xu & Hsing Hung Chen & Rong Rong Zhang, 2020. "The Impact of Intellectual Capital Efficiency on Corporate Sustainable Growth-Evidence from Smart Agriculture in China," Agriculture, MDPI, vol. 10(6), pages 1-15, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pearl Abredu & Cai Li & Frank Kofi Essien & Isaiah Agbenu Akanbi Adegoke, 2023. "Unleashing Potential: Overcoming Bottlenecks and Catalyzing Innovations in Intellectual Capital Intellectualization of Small and Medium-Sized Enterprises in Jiangsu During the Post-Industrial Era," SAGE Open, , vol. 13(4), pages 21582440231, December.
    2. Jian Xu & Muhammad Haris & Hongxing Yao, 2019. "Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan," Sustainability, MDPI, vol. 11(23), pages 1-23, November.
    3. Md. Sohel Rana & Syed Zabid Hossain, 2023. "Intellectual Capital, Firm Performance, and Sustainable Growth: A Study on DSE-Listed Nonfinancial Companies in Bangladesh," Sustainability, MDPI, vol. 15(9), pages 1-23, April.
    4. Hongxing Yao & Muhammad Haris & Gulzara Tariq & Hafiz Mustansar Javaid & Muhammad Aamir Shafique Khan, 2019. "Intellectual Capital, Profitability, and Productivity: Evidence from Pakistani Financial Institutions," Sustainability, MDPI, vol. 11(14), pages 1-30, July.
    5. Samson, Kelly & Bhanugopan, Ramudu, 2022. "Strategic human capital analytics and organisation performance: The mediating effects of managerial decision-making," Journal of Business Research, Elsevier, vol. 144(C), pages 637-649.
    6. Lujing Liu & Jiyue Zhang & Jian Xu & Yiqun Wang, 2022. "Intellectual Capital and Financial Performance of Chinese Manufacturing SMEs: An Analysis from the Perspective of Different Industry Types," Sustainability, MDPI, vol. 14(17), pages 1-17, August.
    7. Corinne Ollier Bessieux & Emmanuelle Negre & Marie-Anne Verdier, 2022. "Moving from Accounting for People to Accounting with People: A Critical Analysis of the Literature and Avenues for Research," Post-Print hal-03889478, HAL.
    8. Galyna Boikivska & Roksolana Vynnychuk & Oksana Povstyn & Halyna Yurkevich & Zoriana Gontar, 2021. "Cognitive Aspects in the Process of Human Capital Management in Conditions of Post-Pandemic Social Constructivism," Postmodern Openings, Editura Lumen, Department of Economics, vol. 12(1), pages 296-307, March.
    9. Amalou-Döpke, Linda & Süß, Stefan, 2014. "HR measurement as an instrument of the HR department in its exchange relationship with top management: A qualitative study based on resource dependence theory," Scandinavian Journal of Management, Elsevier, vol. 30(4), pages 444-460.
    10. Goretzki, Lukas & Reuter, Marek & Sandberg, Joanna & Thulin, Gabriella, 2022. "Making sense of employee satisfaction measurement – A technological frames of reference perspective," The British Accounting Review, Elsevier, vol. 54(1).
    11. Jian Xu & Binghan Wang, 2018. "Intellectual Capital, Financial Performance and Companies’ Sustainable Growth: Evidence from the Korean Manufacturing Industry," Sustainability, MDPI, vol. 10(12), pages 1-15, December.
    12. Finch, John & Wagner, Beverly & Hynes, Niki, 2012. "Resources prospectively: How actors mobilize resources in business settings," Journal of Business Research, Elsevier, vol. 65(2), pages 164-174.
    13. Kuipers, Ben S. & Giurge, Laura M., 2017. "Does alignment matter? The performance implications of HR roles connected to organizational strategy," LSE Research Online Documents on Economics 115318, London School of Economics and Political Science, LSE Library.
    14. Marko Slavković & Jasmina Ognjanović & Marijana Bugarčić, 2023. "Sustainability of Human Capital Efficiency in the Hotel Industry: Panel Data Evidence," Sustainability, MDPI, vol. 15(3), pages 1-16, January.
    15. Barone, Elisabetta & Ranamagar, Nathan & Solomon, Jill F., 2013. "A Habermasian model of stakeholder (non)engagement and corporate (ir)responsibility reporting," Accounting forum, Elsevier, vol. 37(3), pages 163-181.
    16. Guangchun Jin & Jian Xu, 2022. "Does Intellectual Capital Affect Financial Leverage of Chinese Agricultural Companies? Exploring the Role of Firm Profitability," Sustainability, MDPI, vol. 14(5), pages 1-14, February.
    17. Oksana Pirogova & Olga Voronova & Tatyana Khnykina & Vladimir Plotnikov, 2020. "Intellectual Capital of a Trading Company: Comprehensive Analysis Based on Reporting," Sustainability, MDPI, vol. 12(17), pages 1-21, August.
    18. David Deakins & Jo Bensemann, 2019. "Achieving Innovation In A Lean Environment: How Innovative Small Firms Overcome Resource Constraints," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(04), pages 1-36, May.
    19. Monika Barak & Rakesh Kumar Sharma, 2023. "Investigating the Impact of Intellectual Capital on the Sustainable Financial Performance of Private Sector Banks in India," Sustainability, MDPI, vol. 15(2), pages 1-21, January.
    20. Muhammad Shujaat Mubarik & V. G. R. Chandran & Evelyn S. Devadason, 2018. "Measuring Human Capital in Small and Medium Manufacturing Enterprises: What Matters?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(2), pages 605-623, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:19:p:5328-:d:271134. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.