Intellectual capital and competitive advantage in Uganda’s microfinance industry

Abstract

Purpose

The paper examines individual contribution of intellectual capital elements to competitive advantage. The purpose of this paper is to explore the weight of individual intellectual capital elements in explaining competitive advantage in Uganda’s microfinance industry.

Design/methodology/approach

Hierarchical regression was used because of its capacity to indicate precisely what happens to the model as different predictor variables are introduced.

Findings

This study confirms that the three intellectual capital elements are the strong predictors of competitive advantage and they account for 44 percent of variance in competitive advantage. However, the order of importance of these variables in explaining the variance in competitive advantage in the microfinance industry (basing on their standardized β values) is relational capital, structural capital and human capital.

Research limitations/implications

Only a single research methodological approach was employed and future research through interviews could be undertaken to triangulate the data. Furthermore, the findings from the present study are cross-sectional; future research should be undertaken to examine the longitudinal effects of intellectual capital elements.

Practical implications

The findings can help the management to intensify initiatives to encourage greater understanding and acceptance of the concept of intellectual capital that boosts competitive edge in the industry.

Originality/value

This is the first study that focuses on testing the individual contribution of intellectual capital dimensions to competitive advantage in Uganda’s microfinance institutions.

Citation

Kamukama, N. and Sulait, T. (2017), "Intellectual capital and competitive advantage in Uganda’s microfinance industry", African Journal of Economic and Management Studies, Vol. 8 No. 4, pp. 498-514. https://doi.org/10.1108/AJEMS-02-2017-0021