Effects of Intellectual Capital and University Knowledge in Indigenous Innovation: Evidence from Indian SMEs

Intellectual capital and collaboration with universities are vital knowledge management practices for small and medium-sized enterprises (SMEs) to innovate and improve the effectiveness of their operations. This study investigates empirically the impacts of intellectual capital and university knowledge on indigenous innovation and how business and institutional environments affect the relationships. The research model is tested using moderated regression analysis and data collected from 150 SMEs in India. The results show that intellectual capital and university knowledge improve indigenous innovation both individually and interactively. The effect of intellectual capital on indigenous innovation is amplified by dysfunctional competition whereas the effect of university knowledge on indigenous innovation is attenuated by environmental uncertainty. In addition, we find that indigenous innovation is positively associated with business performance. The impact of indigenous innovation on business performance is enhanced by dysfunctional competition but reduced by environmental uncertainty.