Intellectual capital, absorptive capacity, and firm performance: Empirical evidence from micro, small, and medium enterprises in the Greater Accra Region of Ghana

Abstract

This study examines how intellectual capital affects the financial success and long-term sustainability of Ghanaian micro, small, and medium enterprises (MSMEs). It also reviews how acquiring new knowledge could play a role in that relationship. The study used a quantitative survey, employing a structured questionnaire to gather data from 327 MSME owners and managers in Ghana. Intellectual capital is measured as human, structural, and relational capital, while absorptive capacity is measured as knowledge acquisition, assimilation, transformation, and use. Relational capital emerged as the dominant driver of firm outcomes, exerting significant positive effects on financial performance, business sustainability, and absorptive capacity. Structural capital marginally predicted financial performance and significantly predicted absorptive capacity, but produced no direct effect on business sustainability. Human capital yielded no significant direct or mediated effects on any outcome variable. Absorptive capacity strongly and independently predicted both outcome variables, fully mediating the effects of structural and relational capital while human capital pathways through absorptive capacity remained non-significant. These findings establish important boundary conditions for human capital theory in informal institutional environments and clarify absorptive capacity as a necessary conversion mechanism within the resource-based view (RBV) theoretical framework. Policymakers and MSME managers should prioritise external network cultivation and knowledge management systems over standalone workforce training investments.