Refueling intellectual capital toward innovation performance of SMEs in Saudi Arabia: mediating the role of entrepreneurial opportunity recognition

Abstract
Purpose– The objectives of this research were to inspect the relationship of intellectual capital (IC), along
with its dimensions (human, structural and internal and external relational capital) with innovation
performance (IP), to explore entrepreneurial opportunity recognition (EOR) as a mediator between the IC and
IP of small and medium-sized enterprises (SMEs) in Saudi Arabia.
Design/methodology/approach– This research used data collected via a well-structured
questionnaire. The sample size was comprised of 457 participants who were owners and/or managers
of SMEsinSaudiArabia.Further,thefindingswereextractedfromdatausingpartialleastsquares(PLS)
techniques.
Findings– The results indicated that all dimensions of IC, including human capital (HC), structural
capital (SC), internal relational capital (IRC) and external relational capital (ERC), had a significant
relation with both IP and EOR. It was also shown that EOR positively influenced IP. Furthermore, the
results showed that EOR played an important role as a mediator between IC (HC, SC, IRC and ERC)
and IP.
Practical implications– The present research offered a beneficial and novel managerial and theoretical
strategy for improving a given firm’s IP with the support of IC and EOR. This finding offered a vision to the
management teams of SMEs for full utilization of IC and IP. The present study also provided policymakers,
administration and future studies with a path to improving the production and services of SMEs to secure
market advantages.
Originality/value– According to the author’s best knowledge, the present research represented the
first attempt to expose the mediating role of the EOR relationship between IC and IP. Furthermore, the
present study also developed the relationship between dynamic capabilities (DC) theory, intellectual
capital-based view (ICV) theory and resource-based view (RBV) theory, with variables that reveal the
theoretical foundation of the study. Finally, the results of this study were verified by the existing
literature.