Intellectual capital, entrepreneurial orientation, and technical innovation in small and medium‐sized enterprises

The purpose of this paper is to empirically investigate the effects of intellectual capital (IC) on technical innovation (TI) and entrepreneurial orientation (EO) in small and medium‐sized enterprises (SMEs). Hypotheses were tested using a survey data set of 464 questionnaires collected from senior, middle, and functional managers, in addition to employees working in 63 SMEs operating in Jordan. The findings show that all IC dimensions have positive significant effects on both TI as well as EO. More specifically, human capital and relational capital emerged as having the strongest effects on TI, whereas relational capital and human competence had the strongest effects on EO. Interestingly, relational capital was the only IC dimension that had a particularly strong and positive significant effect on both EO and TI. Moreover, all EO dimensions had positive significant effects on TI. As for the mediating effect of EO, it was found to have quite a strong and partial mediating effect on the relationship between each IC dimension (relational, structural, human, and human competence) and TI. It was also noted that EO had a particularly strong partial mediating effect on the relationship between structural capital and TI, as well as human competence and TI. Given the unique context within which SMEs are established and developed, in terms of heavily investing in IC, as well as their supposedly entrepreneurial and innovative nature, this study provides an original contribution to the TI literature.