Innovation Performance of SMEs: The vital roles of Intellectual Capital, Organizational Agility and Organizational Inertia

This study will investigate the direct effect of intellectual capital on the innovation performance of Pakistani manufacturing SMEs. It also investigates whether the link is mediated by organizational agility and moderated by organizational inertia. A quantitative approach was taken. A self-administered questionnaire was used to gather 230 samples from managers and owners of manufacturing SMEs. The data was examined using version 4.0 of SMART-PLS. A study framework that includes mediation and moderation is used. The findings show that intellectual capital has a beneficial influence on the innovation performance of manufacturing SMEs in Pakistan. Furthermore, organizational agility positively mediates the relationship between intellectual capital and innovation performance, whereas organizational inertia negatively moderates and weakens the intellectual capital–innovative performance relationship. The study theoretically supports the resource-based view (RBV) and dynamic capabilities by providing empirical evidence for how internal resources improve innovation success. Practically, the findings provide managers with strategic insights into managing intellectual capital, agility, and inertia to drive innovation Performance. These relationships are rarely investigated in Pakistan