Intellectual capital, knowledge management and higher education institutions performance in Pakistan : Role of innovation as mediator

In the economic development and growth higher education plays a vital role particularly in the context of Pakistan. In spite of this higher education performance is seldom hindrance due to limited knowledge resources, lack of innovation capabilities and lack of knowledge management practices. The aim of this study is to investigate the influence of components of intellectual capital (human capital, structural capital, and relational capital) and knowledge management (knowledge acquisition, knowledge sharing, and knowledge application) on higher education performance with mediating variable innovation. The research framework was developed based on the integration of Resource-Based-View and Knowledge-Based-View theories. The nature of the study is quantitative, and the study used proportionate stratified random sampling technique, and the questionnaire was adapted and distributed among top level managers such as VC’s, HoD’s, Deans and Directors. Thus, 155 questionnaires were distributed with a response rate 93%. The partial least square structural equation modelling (PLS-SEM) applied to test the hypothesis and for data screening SPSS28 was used. The findings revealed that human capital and knowledge sharing have a direct relationship with higher education institutions’ performance. However, structural capital, relational capital, knowledge acquisition, and knowledge application have no direct relationship with higher education institution’ performance. Additionally, innovation mediates the relationship between human capital, structural capital, knowledge application, and performance of higher education institutions in Pakistan. Also, this study provides the practical implication to the managers of higher education institutions of Pakistan, establishing intellectual capital (human capital, structural capital, relational capital) and entrenching knowledge management practices (knowledge acquisition, knowledge sharing and knowledge application with fostering innovation are important for the higher education performance of Pakistan