Published date: Oct 15 2024

Journal Title: KnE Social Sciences

Issue title: 8th International Conference on Sustainability (8th ICoS): Sustainable Economics

Pages: 233–250

DOI: 10.18502/kss.v9i29.17253

Retno Cahyaningatiretnocahyaningati@dosen.itbwigalumajang.ac.idStudent of Doctoral Program in Economics, Faculty of Economics and Business, University of Merdeka Malang, Malang, Indonesia

Grahita ChandrarinDoctoral Program in Economics, Faculty of Economics and Business, University of Merdeka Malang, Malang, Indonesia

Harmono .Doctoral Program in Economics, Faculty of Economics and Business, University of Merdeka Malang, Malang, Indonesia

Diyah Sukanti CahyaningsihDoctoral Program in Economics, Faculty of Economics and Business, University of Merdeka Malang, Malang, Indonesia

This study aims to examine the correlation between intellectual capital, innovation, and corporate performance in micro, small, and medium enterprises (MSMEs) located in East Java, Indonesia. The proxy for each variable uses a Likert scale measurement by distributing questionnaires to MSME actors. The research sample consisted of 125 MSME actors who completed a returned questionnaire, whereas the study population consisted of 500 MSME company players. The PLS 3 software program is used in the quantitative descriptive data analysis technique. The findings demonstrated that innovation has a major impact on business success and that intellectual capital has a considerable impact on both. Additionally, innovation mediates the relationship between intellectual capital and business performance. Increased innovation will eventually lead to improved company performance if the intellectual capital developed by MSME business actors is more focused on innovation. Specifically the speed and quality of innovation, such as creating new and high-quality products, high-quality services, and problem-solving strategies that are also more accurate than those of other companies. This research contributes to the implications of intellectual capital in the business world which can be carried out early on, in the sense that even though companies are on a micro scale, MSME business actors can manage intellectual capital well in creating company performance.

Keywords: intellectual capital, innovation, company performance, MSMEs 

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