The effect of human capital on innovation: The mediation role of knowledge creation and knowledge sharing in small companies

  • Received June 27, 2023;
    Accepted September 19, 2023;
    Published September 28, 2023
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/kpm.07(1).2023.05
  • Article Info
    Volume 7 2023, Issue #1, pp. 64-75
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This work is licensed under a Creative Commons Attribution 4.0 International License

Small companies face many obstacles and limitations that require more attention, especially the low quality of human resources, so that they continue to make a strategic contribution in creating innovation and becoming a driving force for a country’s economy. The purpose of this study is to examine the effect of human capital, knowledge creation and knowledge sharing on innovation. Data were collected using an online questionnaire. The research sample consisted of 396 small companies, and 187 were returned, filled in completely by managers of small companies in the Province of Bali, Indonesia. Data were analyzed using SEM with the PLS approach with WarpPLS 7.0. The results demonstrate that human capital has a significant positive influence on knowledge creation (β = 0.784; p < 0.001), human capital was found to have an effect on innovation (β = 0.212; p < 0.001), human capital has an effect on knowledge sharing (β = 0.853; p < 0.001), knowledge creation influences innovation (β = 0.428; p < 0.001), knowledge sharing has an effect on innovation (β = 0.323; p < 0.001), knowledge creation successfully mediates the influence of human capital on innovation, and knowledge sharing mediation is successful in the influence of human capital on innovation. This study improves the understanding of human capital by reducing the scarcity of empirical research and by uncovering the mechanisms through knowledge creation and knowledge sharing that influence innovation.

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    • Figure 1. PLS results
    • Table 1. Descriptive statistics of variables studied
    • Table 2. Results of goodness of fit research model
    • Table 3. Validity and reliability testing results
    • Table 4. Effect size
    • Table 5. Path coefficient
    • Table 6. Mediation analysis
    • Conceptualization
      Ida Ketut Kusumawijaya, Partiwi Dwi Astuti
    • Formal Analysis
      Ida Ketut Kusumawijaya, Partiwi Dwi Astuti
    • Funding acquisition
      Ida Ketut Kusumawijaya, Partiwi Dwi Astuti
    • Investigation
      Ida Ketut Kusumawijaya
    • Methodology
      Ida Ketut Kusumawijaya, Partiwi Dwi Astuti
    • Project administration
      Ida Ketut Kusumawijaya, Partiwi Dwi Astuti
    • Resources
      Ida Ketut Kusumawijaya
    • Software
      Ida Ketut Kusumawijaya
    • Validation
      Ida Ketut Kusumawijaya, Partiwi Dwi Astuti
    • Visualization
      Ida Ketut Kusumawijaya
    • Writing – original draft
      Ida Ketut Kusumawijaya
    • Data curation
      Partiwi Dwi Astuti
    • Supervision
      Partiwi Dwi Astuti
    • Writing – review & editing
      Partiwi Dwi Astuti