This study explores the relationship between intellectual capital (IC), dynamic capabilities (DCs) and organisational performance (OP), addressing disagreements on whether IC is an antecedent or consequence of DCs and whether IC and DCs mediate or moderate the interactions between these constructs.
To address the study questions, four different models were developed that highlight the controversy among researchers regarding the nature of the interplay between IC, DCs, and OP. A cross-sectional survey of 394 managers working for government agencies and departments in Jordan’s capital city, Amman, was conducted to investigate different scholars’ perspectives on the nature of the interaction between these variables. The retrieved responses (166 with a 42.1% response rate) were analysed using SmartPLS.
Our results revealed that IC did not affect OP, whereas DCs did across the four models. IC affects DCs, and DCs also affect IC, highlighting the potential reciprocal relationship. The relationship between the variables is one of mediation and not moderation, which implies that DCs do not function as a moderator between IC and OP, and IC does not act as a moderator between DCs and OP. These results offer a complex picture of the connections between IC, DCs and OP, which has interesting implications for practice.
Our study reveals the significant role of DCs in OP within government institutions by extending theories on DCs’ adaptability and competitiveness. It emphasises the need for active management of IC to yield performance benefits, aligning with resource-based theories. This study also clarifies the mediation and moderation effects, opens new research avenues and highlights the potential reciprocal interaction between IC and DCs.
This study is the first to explore the reciprocal interaction between IC and DCs and the mediating and/or moderating role of either IC or DCs in their relationship with OP within the public sector, which has not received sufficient attention from scholars, especially in developing countries such as Jordan.
