Relationships between Social and Intellectual Capital: empirical evidence from IC statements

This paper investigates on the determinants of a firm’s intellectual capital (IC). Acknowledging the Literature on this topic, we focused on the effect that the assessment of social capital (SC) has on intellectual capital, according to the theoretical model put forward by Nahapiet and Goshal (1998). Starting from the concept of organizational advantage, they argued that three SC dimensions, namely the structural, the cognitive and the relational dimensions, contribute to the creation of IC. Different facets of the three dimensions help in providing combination capabilities and motivating the exchange of IC that eventually produce new IC. This study extends this literature by empirically investigating on these relationships. By analysing the contents of the IC statements disclosed by 36 firms, we first identified which indicator, or measure, has been developed and assessed to monitor the facets of SC and the level of IC. Then, we performed a path analysis, using PLS models, in order to uncover the effect that the single SC dimension has on the creation of IC. Sometimes results contradict the theoretical assumptions. Theory, in fact, predicts that cognitive and structural dimensions of SC enhance human capital, but empirical evidence did not support this hypothesis. Similar argumentations can be put forward for the empirical evidence from the path between the cognitive dimension of SC and organizational IC. On the other hand, as theoretically predicted, an increase in the assessment of the level of relational SC has a positive effect on the level of human capital.