Intellectual Capital as a Driver of Sustainability Performance in Small and Medium Enterprises

Abstract

Small and medium enterprises (SMEs) play a vital role in fostering economic growth and sustainable development. Despite the recognized importance of intellectual capital as a strategic organizational resource, empirical evidence on its contribution to the sustainability performance of SMEs in developing economies remains limited. This study examined the relationship between intellectual capital and sustainability performance and assessed the predictive effect of intellectual capital on sustainability performance among SMEs. Intellectual capital was conceptualized through its human, structural/organizational, and relational capital dimensions, while sustainability performance was measured across its economic, environmental, operational, and social dimensions. A quantitative descriptive-correlational research design was employed, with purposive sampling used to select 100 SME owners and managers. Data were analyzed using descriptive statistics, Spearman's rank-order correlation, and regression analysis. The findings revealed that SMEs exhibited a high level of intellectual capital and a very high level of sustainability performance. Spearman's rank-order correlation indicated a statistically significant, moderate positive relationship between intellectual capital and sustainability performance (rₛ = .359, p < .001). Furthermore, regression analysis demonstrated that intellectual capital significantly predicted sustainability performance (β = .486, R² = .236, F(1, 98) = 30.34, p < .001), explaining 23.6% of the variance in sustainability performance. These findings highlight the strategic importance of strengthening human, structural, and relational capital to enhance sustainable organizational outcomes. The study contributes empirical evidence from a developing economy and provides practical implications for SME managers and policymakers seeking to improve long-term sustainability, organizational resilience, and competitive advantage through effective intellectual capital management.