The Mediating Effect of Knowledge Management on the Relationship Between Professional Self‐Efficacy and Corporate Profitability

ABSTRACT This study analysed the mediating effect of knowledge management on the relationship between professional self‐efficacy and corporate profitability. The data were gathered using a survey of 50 formally established large and medium‐sized mining companies in Peru. Partial least squares structural equation modelling (PLS‐SEM), utilising SmartPLS4 software, was the multivariate statistical technique used to analyse the data and confirm the research hypotheses. The results show that knowledge management has a statistically significant complementary mediating effect on the relationship between professional self‐efficacy and corporate profitability. These results suggest that both academics and corporate executives should give due importance to the knowledge management strategies used by organizations in view of this construct's proven mediating role in affecting profitability. They also suggest that self‐efficacious managers can boost their incidence on profitability if knowledge management becomes a cultural and strategic practice in the organization. Additionally, the confirmation of the upper echelons and the knowledge‐based theories indicate that key personal characteristics of top managers and how knowledge is managed are critical in the performance of the organization.