The Mediating Role of Absorptive Capacity in the Relationship between Intellectual Capital and Organizational Innovation in Higher Education Institutes of Punjab, Pakistan

This study aims to investigate the mediating role of absorptive capacity (ACAP) between intellectual capital (IC) and organizational innovation in the context of Higher education institutions (HEI) of Punjab Pakistan. This study used a structured questionnaire to collect the data from employees of HEI Pakistan. This study uses a covariance-based structural equation modeling technique (CB-SEM) for data analysis through AMOSE software. This study performed CB-SEM in two steps; confirmatory factor analysis (CFA) and SEM analysis. Confirmatory factor analysis ensures the reliability and validity of the construct while SEM analysis was used to test the modeled hypothesis. The study found that IC has a significant positive relationship with ACAP and organizational innovation. ACAP has a significant and positive relationship with organizational innovation and also plays a mediating role between IC and organizational innovation. The study will help the HEIs of Pakistan to boost innovation activities more effectively in order to improve their innovations performance. This study enriches the theoretical literature of IC by using five dimensions, human, social, structural, relational and spiritual capital, of IC and by suggesting a new path for organizational innovations. Moreover, a few studies investigated a relationship between IC and organizational innovation with the mediating role of absorptive capacity; however, in HEIs Pakistan context, no study exists. This study can be reproduced in another sector like information and communication technology and the banking sector.