The role of circular intellectual capital for SMEs: a new lever for competitive advantage?

Purpose Recent studies have highlighted the crucial role of integrating circular economy principles into the intellectual capital (IC) framework, thus contributing to the related circular intellectual capital (CIC). Despite this recent and increasing interest in academic literature in these practices, scholars know very little about the effects of CIC on SMEs' performance. This study aims to fill this gap and advances this emerging literature by investigating if and to what extent the CIC measured through its three dimensions – circular human, organisational and relational capital (circular human capital (CHC), circular organisational capital (COC) and circular relational capital (CRC), respectively) – allows companies to gain competitive advantages, measured in terms of strategic and financial performance (SP and FP, respectively). Design/methodology/approach This empirical research is of a quantitative nature and adopts a survey methodology for collecting the data and testing the proposed conceptual model. Specifically, we collected data from 512 SMEs and tested our hypotheses using a partial least squares approach to structural equation modeling due to the exploratory nature of this research. Findings Our results show that CHC and COC positively and significantly influence SP and FP. Instead, CRC has a positive impact only on SP, while its effect on FP is not statistically significant. Originality/value This study is the first to adopt the recent construct of CIC and empirically test its three dimensions on firm performance. This construct has only recently been introduced, so there is a strong demand for further studies to evaluate its role for SMEs, particularly in achieving competitive advantage.