Impact of Intellectual Structural Capital and Knowledge-Based Dynamic Capabilities on the Financial Performance of the Indigenous Craft Industry in Sri Lanka
Sujeewa Kodithuwakku
H. M. S. Priyanath 
Abstract
This study attempts to identify the relationships between Intellectual Structural Capital (ISC), Knowledge-Based Dynamic Capabilities (KBDCs), and Financial Performance (FP), with special reference to the Indigenous Craft Industry (ICI) in Sri Lanka. The data were collected through a structured questionnaire from 231 owners of firms selected from indigenous crafts villages in Sri Lanka. The PLS-SME method was used to analyse data. The study found that ISC positively influences KBDCs, but does not directly affect the FP of ICI firms in Sri Lanka. Further, it revealed that the owners’ ability to acquire knowledge and create knowledge have a positive impact on FP, and both variables fully mediate between ISC and the FP. By strengthening knowledge acquisition and knowledge creation capabilities of owners of ICIs and applying a proper mechanism to utilise ISC to transform tacit intellectual knowledge into explicit intellectual knowledge, the FP of firms in the ICI can be optimised.
Keywords: Intellectual Structural Capital, Knowledge-Based Dynamic Capabilities, Financial Performance, Indigenous Craft Industry
Volume 13, Issue 2
December 31, 2022
Pages: 48-75
DOI: http://doi.org/10.4038/cbj.v13i2.124
Suggested citation:
Kodithuwakku, S. & Priyanath, H. M. S. (2022). Impact of intellectual structural capital and knowledge-based dynamic capabilities on the financial performance of the indigenous craft industry in Sri Lanka. Colombo Business Journal, 13(2), 48–75. http://doi.org/10.4038/cbj.v13i2.124
Sujeewa Kodithuwakku
Department of Business Finance, University of Peradeniya, Sri Lanka
H. M. S. Priyanath
Department of Economics and Statistics, Sabaragamuwa University of Sri Lanka, Sri Lanka
