Relationship between Intellectual Capital and Innovations: The Mediating Role of Organizational Capital (The case of Commercial Banks in Ethiopia)
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Date
2016-06
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Addis Ababa University
Abstract
The study was conducted with the aim of investigating the direct and indirect effect of
intellectual capital on innovations considering organizational capital as a mediator in the
Ethiopian commercial banking sector. Primary data was collected using a 5 item likert scaled
questionnaire from 235 branch managersfrom282 expected sample size having a response rate
of (83%). Data was tested in confirmatory factor analysis and it fulfills construct validity (both
convergent and discriminant validity) using Analysis of Moment Structure (AMOS) version 20. A
deductive and quantitative approach was followed to test the model. Empirical findings of the
study show that, intellectual capital does not have a significant direct effect on product
innovation with the exception of organizational capital. Organizational capital mediates the
relationship between intellectual capital and innovations. Human, organizational and customer
capital have a positive direct effect on process innovation while social capital has a negative
direct effect. Human, customer and social capital do not have a significant direct effect on
Ethiopian banking sector's product innovation.To becompetitivein the industry, managers should
utilize the skills, competencies, and experiences of their employees through well designed
learning, organizational culture and supportive organizational structure.
Key words: intellectual capital, product innovation, process innovation
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Keywords
intellectual capital, product innovation, process innovation