Intellectual capital and performance: testing interaction effects
Abstract
Purpose
The purpose of this paper is to examine the interaction effect of intellectual capital elements and how they fuse to affect financial performance in microfinance institutions. The major purpose is to explore the appropriate blend or mix of intellectual capital elements that explains the source of value creation – hence performance – in microfinance institutions.
Design/methodology/approach
The paper adopts the ModGraph program (Excel version) along with the Kenny and Boran approach to test conditional hypotheses.
Findings
The magnitude effect of human capital on performance depends on any of structural or relational capital; hence the assumption of nonadditivity is met. However, no significant interaction effects were established between relational and structural capital.
Research limitations/implications
Only a single research methodological approach was employed and future research through interviews could be undertaken to triangulate. Furthermore, the findings from the present study are cross‐sectional – future research should be undertaken to examine the multiplicative effects studied in this paper across time
Practical implications
In order to boost the wealth of microfinance institutions in Uganda, managers should always endeavor to find a viable intellectual capital mix or blend that can add value to the firm.
Originality/value
This is the first study that focuses on testing the interactive effects of intellectual capital elements on financial performance in Ugandan microfinance institutions.
Keywords
Citation
Kamukama, N., Ahiauzu, A. and Ntayi, J.M. (2010), "Intellectual capital and performance: testing interaction effects", Journal of Intellectual Capital, Vol. 11 No. 4, pp. 554-574. https://doi.org/10.1108/14691931011085687
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, Emerald Group Publishing Limited