Driving business performance through intellectual capital, absorptive capacity, and innovation: The mediating influence of environmental compliance and innovation

This paper investigates the relationships between intellectual capital (IC), knowledge absorptive capacity (KAC), environmental compliance, innovation, and business performance in Vietnam. The study surveyed 206 management team members across various industries using a structured questionnaire and conducted data analysis using PLS-SEM. The findings reveal that IC heavily influences KAC, which in turn enhances business performance when combined with innovation. Additionally, environmental compliance and innovation partially mediate the association between KAC and business performance. The research recommends that managers should concentrate on improving KAC and innovative capabilities while ensuring environmental compliance to leverage IC and improve business performance. This study makes a significant contribution to the existing literature by extending the scope of the resource-based view and shedding light on the roles of KAC, environmental compliance, and innovative capacity in emerging markets like Vietnam.