Clarifying the Effect of Intellectual Capital on Performance: The Mediating Role of Dynamic Capability

Recent studies suggest a potential relationship between intellectual capital and dynamic capability in achieving performance. This is unsettling for managers because these studies contain little effort to develop a framework for understanding the relationship. To examine this unnerving potential, we develop and test a theoretical model that explains how dynamic capability mediates the impact of intellectual capital on performance. In this study, the scope of intellectual capital includes human capital, relational capital and structural capital. This study examines the pooled data of 242 high‐technology firms from 2001 to 2008. Results from Bayesian regression analysis suggest that the effect of structural capital on performance is completely mediated by dynamic capability. Furthermore, the findings show that dynamic capability does not completely mediate the respective effects of human capital and relational capital on performance, but does so only partially. These results provide convincing support for the importance of dynamic capability through accumulating R&D and marketing capability over time, thereby enhancing firm performance. The empirical findings and the ensuing discussion will be of interest to managers and practitioners.