Effect of intellectual capital on dynamic capabilities

Purpose – The purpose of this paper is to examine the effects of intellectual capital (human, social and organizational capital) on dynamic capabilities (learning, integration, reconfiguration and alliance management). Design/methodology/approach – A methodical review of relevant literature and the theory of resource-based view, knowledge-based view and dynamic capability view serves as a starting-point to develop a framework for linking intellectual capital with dynamic capabilities. A total of 241 managers from the public sector banks in India was selected as sample of study and structural equation modelling was applied to provide strong evidence for the hypothesis. Findings – The study established a strong effect of intellectual capital dimensions on dynamic capabilities in the surveyed banking firms. Human and social capital had the most profound effect on learning, integration, reconfiguration and alliance management capabilities. As regards to organizational capital, an unexpected negative effect on reconfiguration and alliance management capabilities was observed. Originality/value – The study clarifies the role of knowledge for various capability developments. One of the significant contributions is with reference to the linkages of structural aspects of knowledge and dynamic capabilities, a link that can barely be seen in the existing literature. To the author’s knowledge the present study makes a preliminary effort to broaden the concepts appeal in new geographical boundaries and empirical context, thus making an original contribution to the Indian banking industry and strategic management literature, significantly.