Towards a Better Understanding of Intellectual Capital in Small and Medium Enterprises (SMEs) Operating in Service Sector

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Abstract

The aim of this paper is to investigate the influence of intellectual capital on the organizational performance of electronics SMEs operating in service sector. A valid research questionnaire was utilized to conduct this empirical study. A total of 400 individuals from electrical and electronics manufacturing sector were involved. Integrated Intellectual Capital Model was used to examine the role of intellectual capital in SMEs. Six research hypotheses were constructed to test the influence of intellectual capital on the organizational performance of SMEs. Multiple Regression analysis was used to test the proposed research hypotheses. The empirical results showed that all seven hypotheses were supported. The findings of this study provide valuable insights on the generalizability of intellectual capital in SMEs in electronics sector in Malaysia. This study is cross sectional, therefore the findings of this study has limited scope. Intellectual capital is a prime strategic asset for the success of organizations. The findings of this study will highlight the concept and applications of intellectual capital in SMEs. Currently this research is among a few to investigate the influence of intellectual capital in Malaysian electronics SMEs operating service sector.