Intellectual capital stocks and flows: examining the mediating roles of social capital and knowledge transfer

Purpose This study aims to develop and empirically test a “stocks and flows”-based model of intellectual capital (IC) that examines how human-embodied knowledge (i.e., human capital) can be transformed into organisational non-embodied knowledge (i.e., organisational capital) through the mediating roles of social capital and the knowledge management (KM) process of knowledge transfer. Design/methodology/approach A structural model was developed and empirically tested using a survey data set of 295 questionnaires collected from the “knowledge-intensive” pharmaceutical manufacturing industry in Jordan. Findings Empirical results revealed that each of human capital, social capital and knowledge transfer has a positive and significant effect on organizational capital. In particular, knowledge transfer emerged as having the strongest effect. Social capital, on the other hand, emerged as having a positive and significant effect on knowledge transfer. Mediation analysis revealed that while human capital significantly affects organizational capital, such an effect is partially and significantly mediated by each of social capital as well as knowledge transfer. Practical implications This study provides senior managers in pharmaceutical manufacturing firms with valuable insights pertaining to the development of their IC, in terms of how to exploit their knowledge stocks (i.e. human-embodied knowledge and organizational non-embodied knowledge) through managing knowledge flows between them. This was shown to be significantly leveraged by the mediating roles of social capital as well as knowledge transfer. Originality/value This study provides important theoretical and empirical contributions to the extant literature in a number of ways. It provides better understanding of the intricate linkages among IC dimensions, and how these play complementary roles in organizational capital development. It has also provided important empirical evidence highlighting the vital mediating roles of social capital and knowledge transfer in facilitating knowledge flows, which aid in transforming human-embodied knowledge stocks into organizational-embodied ones.