Fueling Business Success: Intellectual Capital and its Pathways to Performance

Purpose: This study aims to examine the association between the dimensions of intellectual capital and firm performance in the manufacturing sector of Pakistan, highlighting the importance of intellectual capital in times of economic uncertainty and rapid technological changeDesign/Methodology/Approach: Survey data were gathered from 319 supply chain professionals and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). Reliability and validity of the measurement model was tested for the study and the structural model rooted on the DCV was examined. Furthermore, secondary financial performance data (ROA, ROE, ROI) were analyzed using regression analysis from the annual reports and Pakistan Stock Exchange.Findings: This study provides evidence of a positive and significant relationship between the dimensions of intellectual capital and financial and non-financial performance. The predictive ability of the model was robust for ROA and ROE whereas the one for ROI was less so. The non-financial performance has significant explanatory power at the 5% level, which emphasizes the impact of IC on Supply chain performance.Implications/Originality/Value: The findings highlight the strategic significance for firms in harnessing and utilizing intellectual capital to improve supply chain and overall firm performance, especially in turbulent and hyper‐competitive environments.