The Impact of Intellectual Capital on Small Business Performance

Intellectual capital is the main source of competitive advantages for small businesses in developed countries. At the same time developing economies, for example, Russia, experience the lack of theoretical and empirical knowledge in the sphere of effective use of intellectual capital. It results in lower performance results of entrepreneurs. The issue raised in this proposal is currently an active idea of research aimed at getting empirical knowledge about the causal relationship between intellectual capital and SME's performance in the context of developing economies. The study uses PCA and PLS techniques applied to a sample of 125 small businesses from Perm Krai, Russia to identify how components of intellectual capital build the link between intellectual capital and company's performance. According to the obtained results, the primary component of intellectual capital - is structural capital. It gives the grounding for the system of components interrelations, where one component intensifies the influence of another component on performance results.