The Effects of Intellectual Capital on Innovations in the Ethiopian Commercial Banks: The Mediating Role of Knowledge Management
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Date
2015
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Addis Ababa University
Abstract
The study has been conducted with the aim of investigating the direct and indirect effects of
intellectual capital on product, process, and organizational innovations. This study adopts a
deduction approach and a quantitative method as the research methodology. Accordingly, a
questionnaire was distributed to 274 managers of which 229 were collected with a response rate
of 84%. The study employed exploratory and confirmatory factor analyses. An exploratory factor
analysis was conducted using principal component analysis while confirmatory factor analysis
was conducted using structural equation modeling. The measurement fulfills construct validity
(both convergent and discriminant validity) and reliability. Empirical findings of the study
showed that human, social and customer capital have a positive and direct effect on knowledge
management. Knowledge management has a positive and direct effect on product, process and
organizational innovations. Social capital has a positive and direct effect on organizational
innovation but doesn't have effect on product and process innovations. Customer capital has
direct effect on product and process innovations but not on organizational innovation. Counter
to a prior expectations, human capital has a negative and direct effect on product innovation.
Moreover, the finding indicated knowledge management mediates the relationship between
intellectual capital components and product, process, and organizational innovations.
Key words: human capital, social capital, customer capital, knowledge management, product
innovation, process innovation, organizational innovation.
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Keywords
human capital, social capital, customer capital, knowledge management, product innovation, process innovation, organizational innovation