Working Paper # 2017/29 THE ROLE OF INTELLECTUAL CAPITAL MANAGEMENT ON INNOVATION PROCESS: DOES ONE SIZE FIT ALL?

Intellectual Capital Management (ICM) research has focused predominantly on demonstrating the link between ICM and innovative performance from a general, contextfree perspective. This paper analyzes deeper implications of ICM showing the inadequacy of this one-size-fits-all approach, and introduces a more realistic view of the role of ICM on innovation process. We propose an analytical framework where differences in ICM strategies are explained by differences in the environment faced by firms and characterized by disparate levels of threats posed by potential imitators. Although legal protection of intellectual property rights has been traditionally the center of attention on this topic, the firm’s strategy might be far more complex involving alternative ICM activities guided by the incentives of the environment. Using panel data for Spanish SMEs over the 5-year period between 2008 and 2012, we provide evidence consistent with this approach. Empirical analysis shows that certain ICM strategies are profitable in specific environments, but might be very unattractive in other contexts where other strategies prove to be more efficient. These findings contribute to the development of a more nuanced interpretation of the role played by ICM on the innovation process. Implications for management and policy are discussed.