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Fostering Innovation in Education Industry: The Mediating Role of Knowledge Transfer

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Fostering Innovation in Education Industry: The Mediating
Role of Knowledge Transfer
Siti Nurellyza Suria Ab. Rahim, Nor Lelawati Jamaludin, Siti Suriawati Isa
To Link this Article: http://dx.doi.org/10.6007/IJARBSS/v12-i1/12031 DOI:10.6007/IJARBSS/v12-i1/12031
Received: 13 November 2021, Revised: 10 December 2021, Accepted: 30 December 2021
Published Online: 19 January 2022
In-Text Citation: (Rahim et al., 2022)
To Cite this Article: Rahim, S. N. S. A., Jamaludin, N. L., & Isa, S. S. (2022). Fostering Innovation in Education
Industry: The Mediating Role of Knowledge Transfer. International Journal of Academic Research in
Business and Social Sciences, 12(1), 13061322.
Copyright: © 2022 The Author(s)
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Vol. 12, No. 1, 2022, Pg. 1306 1322
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Fostering Innovation in Education Industry: The
Mediating Role of Knowledge Transfer
Siti Nurellyza Suria Ab. Rahim1, Nor Lelawati Jamaludin2, Siti
Suriawati Isa3
1Faculty of Business and Management, Universiti Teknologi MARA, Shah Alam, Selangor,
Malaysia, 2Faculty of Business and Management, Universiti Teknologi MARA, Shah Alam,
Selangor, Malaysia, 3Faculty of Forestry, Universiti Putra Malaysia, Serdang, Selangor,
Malaysia
Corresponding Author Email: norlelawati0019@uitm.edu.my
Abstract
The education industry is debating how to grow profits in the face of strong competition and
the current global economic crisis. Focusing on innovation, according to research, provides a
new viewpoint on value generation and performance enhancement. Thus, the goal of this
study was to assess how personnel in the education industry create innovation through
absorptive capability, knowledge transfer, and psychological empowerment. The
respondents are from Universiti Teknologi MARA, Shah Alam. The data was collected by using
a questionnaire to the 383 administrative staff. The data was analyses using Statistical
Package for the Social Sciences 25 (SPSS25). Results showed that: knowledge transfer mediate
the relationship between (1) absorptive capacity and innovation capability And (2)
psychological empowerment and innovation capability. The novelty of this research is the
contribution of the present body of knowledge through the development of the adapted
model of innovation capability concerning the education industry. This new knowledge should
aid in better assessing the potential impact of knowledge transfer and psychological
empowerment, laying the framework for future research into the relationship between
absorptive capacity and innovation. The findings may also assist stakeholders and
policymakers in developing a plan and taking action to improve organization's innovative
capability.
Keywords: Absorptive Capacity, Psychological Empowerment, Knowledge Transfer,
Innovation Capability, Education Industry.
Introduction
This study tries to investigate the relationship between absorptive capacity, knowledge
transfer, psychological empowerment and innovation in education industries in the
Malaysian context. To the best of this researcher’s knowledge, this concern has been
overlooked in the context of absorptive capacity-innovation literature in both Malaysia and
other business contexts until now (Ashtiani, 2014; Zhao, Jiang, Peng, & Hong, 2020; Wang,
Wang & Chang, 2019).
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In the current competitive business environment, innovation is regarded as a key element for
organizational success (Tohidi & Jabbari, 2012; Alrowwad, & Abualoush, 2020). With regards
to the above matter, literature has proved that to increase the competitive advantage in a
global and growing market, the education industry needs to focus on innovation (Lo & Tian,
2020). In addition, findings discussed in The National Graduate Employability Blueprint
indicates that graduates who graduated from institutions that acquire exploration attributes,
with imaginative and innovative capability will lead to higher changes of employability.
Further, Kandampully, Bilgihan & Zhang (2016); Bani-Melhem et al (2018) also concluded that
innovation is one of the most important components to gain competitive advantage.
According to an analysis of major international scientific journals databases, limited study is
reviewing previous research to identify the factors of innovation (Hjalager, 2010; Kallmuenzer
& Peters, 2018; Kandampully et al 2016; Law et al., 2014). The authors discovered
shortcomings in the knowledge transfer and psychological processes that must be addressed
in order to cater the requirements of employee’s needs. Thus, a study in organizational
innovation context must be configured with an eye on factors influencing and enhancing it to
achieve more effective results in education institutions and to achieve competitive
advantage.
However, before proceeding to examine more on factors influencing innovation capability, it
is important to understand and see where we are right now. Based on the study by
Balasubramaniam & Ragavan (2019), it can be concluded that the implementation of
innovation strategies is still one of the biggest hurdles in Malaysia.
In addition, several researchers, (Chen et al., 2017; Grisseman et al., 2013) stress that
innovation will result in a positive influence on performance. In this vein, it is critical to
identify major drivers of innovation, and top management in the education industry should
be aware of these major drivers in order to execute such innovation initiatives. Although
previous studies have discussed firms’ innovation (i.e., Chesbrough, Lettl, & Ritter, 2018;
Manville et al., 2019; Saebi & Foss, 2015; Torchia & Calabrò, 2019), consensus on the key
drivers of innovation is still inconclusive, (Saebi & Foss, 2015). Innovation has been always
driven by knowledge transfer processes, (Darroch & McNaughton, 2003; Nonaka & Takeuchi,
2007), absorptive capacity (Ye, Liu, & Tan, 2021) and psychological empowerment (Shafait,
Yuming, & Sahibzada, 2021).
The interest in the successful knowledge transfer to achieve organisational goals, such as
innovation, is expressed in the increasingly growing literature (see Hakim & Hassan, 2011;
Darroch & McNaughton, 2003; Shahzad et al., 2020). The effective knowledge transfer
process is often cited as an antecedent of innovation, (Ashtiani, 2014). In addition, a review
of earlier studies investigating the relationship between knowledge transfer and innovation
highlights important findings that knowledge transfer showed significant potential to
enhance organizational innovation, (Lin, 2007; Rhodes et al., 2008; Hakim & Hassan, 2011).
Furthermore, a major part of the economic growth of developed countries comes through
innovation (Ghorbani et al., 2012). Innovation and knowledge transfer are now vital
requirements in modern business and have attracted Malaysian scholars, (Bashir & Farooq ,
2019) and practitioners. Knowledge-based theory has, in the past, both attempted to explain
knowledge sharing and innovation, (Ashtiani, 2014). However, studies conducted in each
research stream, independent of the other, have disregarded the other theory’s potential
impact. In effect, one could say that the effect of absorptive capacity on innovation might be
different in the knowledge transfer context (Zhao et al., 2020).
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With regards to the above, it has been proposed that absorptive capacity is one of the
determinants of knowledge transfer, Gupta & Govindarajan (2000); Lo & Tian (2020) and
innovation (Ye, Liu, & Tan, 2021). In addition, according to, (Pateli & Lioukas, 2019; (Nonaka
& Takeuchi, 2007); (Fujiwara, 2020), organizations innovation initiatives require knowledge,
integrating it with current knowledge from diverse functional domains and turning it into a
variety of innovative outputs.
Knowledge transfer and absorptive capacity are linked; improving absorptive capacity will
likely improve knowledge transfer (Racz & Borza, 2016). Effective knowledge transfer
strategies must consider the absorptive capacity of the knowledge recipients, (Whitehead,
Zacharia & Prater, 2016). However, an educational institution's absorptive capacity has been
mainly undeveloped, (Mariano & Walter, 2015).
As a response, further research is required to investigate efficient absorptive capacity
solutions that can boost receivers' knowledge while also streamlining existing innovation
approaches, (Ferreira & Carayannis, 2019; Yuwono, 2021). Following that, Cheng & Eric (2020)
and Santoro, Bresciani, & Papa (2020) pointed out that the impact of knowledge transfer on
innovation can vary depending on absorptive capacity. This research is critical since it has
both theoretical and practical ramifications.
Theoretically, this study contributes to the body of knowledge because it enriches the
empirical application of absorptive capacity and knowledge transfer theory (Pangarso, Astuti,
Raharjo, & Afrianty, 2020). The practical implications are motivated by practical problems,
especially in the context of higher education (Pangarso, Astuti, Raharjo, & Afrianty, 2020).
Human capital techniques are also important to achieve innovation in organisations,
(Alshekaili & Boerhannoeddin, 2011; Pizarro et al., 2009). Nikpour (2018), suggested that
human capital approaches can be improved through psychological empowerment. In this
regard, research suggests that psychological empowerment at the individual level has
become increasingly important in terms of supporting the provision, sharing, and distribution
of information and knowledge in organisations, as well as innovation (Amichai-Hamburger &
Samuel-Azran, 2008; Wang et al., 2019). By examining the gap between knowledge and
human capital approaches in influencing innovation, this study contributes to the expansion
of Malaysia's education industry potential.
The current study recognizes the value of identifying the linkages between knowledge
transfers and psychological empowerment that influence innovation based on the literature.
As a logical consequence, the study seeks to address a gap in the literature by merging
information transfer and psychological empowerment to optimize educational innovation. To
the best of the authors knowledge, there has been no previous work considering this
relationship in the education industry, particularly in the Malaysian context.
In general, it can be concluded that among all, firms’ innovation relies on factors such as
absorptive capacity (Ye et al., 2021), knowledge transfer (Chesbrough, 2011), and
psychological empowerment (Wang et al., 2019). In addition, previous research by (Xie, Zou,
& Qi, 2018; Wang et al., 2019; Fayyaz, Chaudry, & Fiaz, 2021; Cheng & Eric, 2020; Steed &
Gair, 2020 and Müller, Buliga, & Voight, 2018) also supported suggestions on further study on
the impact of absorptive capacity, knowledge transfer, psychological empowerment on
innovation. These prior studies, however, have limitations because they were conducted in a
confined context and country, necessitating more research in different industrial sectors
and/or countries. Thus, the study in the area where it is plausible such as Malaysia is justified.
However, taking into account various contextual circumstances that may have an impact on
the expected outcomes could provide an additional explanation. In this view, the researcher
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found that little research attention has been devoted to examining how psychological
empowerment via knowledge transfer enhances innovation (Wang, Wang, & Chang, 2019).
Thus, the putative mediating role of knowledge transfer was investigated in this study in
response to recommendations for establishing integrative models that clarify the impacts of
absorptive capacity and psychological empowerment on innovation development, (Steed &
Gair, 2020; Wang, Wang, & Chang, 2019; Zhao et al., 2020).
The authors believes that this effort could bring more to the table by not only devouring
deeper but also taking a new perspective which are often overlooked by researchers although
their takes could be a turning point for the industry. This is especially relevant given that this
research is being conducted in the education sector, which is a knowledge-intensive
environment with high levels of social interaction.
Thus, the investigations on the mediating relationship of knowledge transfer to the
relationship between absorptive capacity, psychological empowerment and innovation which
is still at scarce are justified. This new knowledge should aid in better assessing the potential
impact of knowledge transfer and psychological empowerment, laying the framework for
future research into the relationship between absorptive capacity and innovation. Thus,
further study on the mediating effect is necessary.
In summary, the statement problem highlighted the importance of understanding the
relationship between absorptive capacity - knowledge transfer -psychological empowerment-
innovations. This study provides a comprehensive look at how these variables interact and
influence one another. By linking knowledge transfer and psychological empowerment
perspective in the absorptive capacity - innovation domain, it could add to knowledge transfer
research. The findings may also assist stakeholders and policymakers in developing a plan and
taking action to enhance innovation.
Literature Review
A major part of the economic growth of developed countries comes through innovation
(Ghorbani, Mofaredi, & Bashiriyan, 2012); (Asunka et al., 2021) innovation has been
constantly studied to serve customers better (Truong, Dang-Pham, McClelland, & Nkhoma,
2020). The review of literature on the innovation framework developed by (Wang, Wang, &
Chang , 2019; Ashtiani, 2014; Szulanski & Capetta, 2003; Nahapiet & Ghoshal, 1998) and other
scholars appear to identify elements that promote innovation culture. However, there is no
definitive agreement on the major drivers of innovation in the education industry, (Lo & Tian,
2020). As a result, the goal of this research is to understand more about the factors that
contribute to educational innovation. Literature has proved that to increase the competitive
advantage in a global and growing market, industry needs to focus on innovation
(Kandampully, Bilgihan, & Zhang, 2016).
Moving ahead, it has been suggested that the receiving unit's absorptive ability is the most
important factor of internal knowledge transfer, (Gupta & Govindarajan, 2000) and it is
known that innovation relies heavily on the creation of new knowledge (Nonaka & Takeuchi,
2007); (Fujiwara, 2020). Knowledge transfer and absorptive capacity are linked; improving
absorptive capacity will likely improve knowledge transfer (Racz & Borza, 2016). Effective
knowledge transfer strategies must consider the absorptive capacity of the knowledge
recipients (Whitehead, Zacharia, & Prater, 2016).
Absorptive capacity is the ability through which an organization acquires knowledge (Liao, Fei,
& Chen, 2007). However, the absorptive capacity of an education institution has been largely
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underdeveloped (Mariano & Walter, 2015). Further research needs to be conducted to
examine effective knowledge transfer practices that can enhance the absorption capacity of
knowledge recipients and to streamline existing innovation models (Ferreira & Carayannis,
2019).
Furthermore, individual psychological empowerment has become increasingly important in
terms of supporting the provision, sharing, and distribution of information, power, and
expertise in businesses, as well as innovation (Wang, Wang, & Chang, 2019). In general, it can
be inferred that a firm's ability to innovate is driven by factors such as knowledge transfer
(Chesbrough, 2011), absorptive capacity (Ye, Liu, & Tan, 2021) and psychological
empowerment (Wang, Wang, & Chang, 2019).
Furthermore, research has revealed that an organization's ability to innovate is strongly
influenced by the level of knowledge sharing among its employees (Noor & Egbu, 2010). In
addition, as innovation relies heavily on the creation of new knowledge (Nonaka & Takeuchi,
2007; Fujiwara, 2020), to acquire, produce, share, and apply information quickly and
efficiently, businesses must invest in knowledge transfer approaches (Cavusgil, Calantone, &
Zhao, 2003).
As pointed out in the literature, it is acknowledged that innovations are now vital
requirements in modern business to remain competitive, (Ashtiani, 2014). Following this,
(Zhao, Jiang, Peng, & Hong, 2020; Lo & Tian, 2020; Santoro, Bresciani, & Papa, 2020 and Wang,
Wang, & Chang, 2019) mentioned that the effect of absorptive capacity and psychological
empowerment on the innovation may be different in the sense of knowledge transfer. The
researchers asserted that innovation increased with the impact of absorptive capacity and
psychological empowerment especially when higher knowledge transfer was evident
(Santoro, Bresciani, & Papa, 2020).
It is also confirmed that knowledge transfer is influence by absorptive capacity of the
knowledge recipients (Whitehead, Zacharia, & Prater, 2016) and psychological empowerment
(Wang, Wang, & Chang, 2019). Knowledge transfer also plays a remarkable role in influencing
innovation capability (Müller, Buliga, & Voight, 2018). In addition, Cheng & Eric, (2020) and
Steed & Gair, (2020) suggested that absorptive capacity influence innovation.
Further, Zhao et al (2020); Lo & Tian (2020) highlights the possible mediating role of
knowledge transfer can alter the impact of the organizational innovation on the extent of
absorptive capacity and psychological empowerment (Wang et al., 2019). This points out that
absorptive capacity and psychological empowerment has a significant role in managing
knowledge transfer, and that this requires more attention from organizational management
in their practice. This rationale clearly emphasizes the potential influence of knowledge
transfer for nurturing absorptive capacity, psychological empowerment towards innovation.
Thus, the investigations on the mediating relationship are justified. Nevertheless, key to
increasing innovation capability lies in resolving the issues relating to knowledge transfer,
absorptive capacity, and psychological empowerment which is discussed below.
Knowledge Transfer Mediates the Relationship between Psychological Empowerment and
Innovation
The process of knowledge transfer consists of "supply" and "demand" activities towards new
knowledge. That is, some people require additional knowledge (for example, to solve specific
work challenges), whereas others are willing to share what they know. Knowledge transfer is
crucial because it enables people to work on existing knowledge within and outside the
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organization, thus enhancing their capacity to come up with creative solutions and enabling
their organizations to develop new platforms for the development of new products and
services to the market (Nonaka & Takeuchi, 2007; Wang & Noe, 2010).
Conversely, when knowledge is not shared, it hinders the capacity to exploit experience and
expertise (Hansen, 2002). Troy et al (2001) found that communication and knowledge transfer
and availability of market information were interacted in predicting new product ideas and
innovation. In addition, previous studies also concluded that psychological empowerment
plays an important role in nourishing employees’ innovative work behavior (Marane, 2012;
Seibert, Wang, & Courtright, 2011; Singh, Sharma, & Sarkar, 2012). Empowered employees
will exhibit more innovative behavior and achieve better task performance (Asfar, Cheema, &
Saeed, 2017).
Individual psychological empowerment is regarded to be one of the factors that contribute to
increased interpersonal trust and a higher likelihood of repeating the empowered act,
(Ferriani, Cattani, & Baden-Fuller, 2009). However, while a number of studies have
investigated the effect of empowering employees’ knowledge sharing and innovation, (i.e.,
Wang, Wang, & Chang , 2019) little research attention has been devoted to examining how
knowledge transfer behavior via psychological empowerment related to innovation. Further,
Wang, Wang & Chang (2019) confirmed that knowledge transfer mediates the relationship
between psychological empowerment and innovation.
Knowledge Transfer Mediates the Relationship between Absorptive Capacity and
Innovation
Previous research has examined the concept of knowledge absorptive capacity in the context
of different fields of study, including organization theory, strategic management, and
economics (Lewin, Massini, & Peeters, 2011). A firm's absorptive capacity is also important to
their innovation activities (Leal-Rodríguez, Ariza-Montes, Roldán, & Leal-Millán, 2014).
Moreover, absorptive capacity plays a leading role in determining the magnitude and range
of knowledge flows (Hurmelinna-Laukkanen, Olander, Blomqvist, & Panfilii, 2012). Therefore,
knowledge absorptive capacity, as a capability that continuously acquires, digests, and utilizes
external knowledge, has become an important process necessary for a firm to identify market
opportunities and use new knowledge to realize innovation.
In addition, (Zhao, Jiang, Peng, & Hong, 2020) and (Lo & Tian, 2020) highlights the possible
mediating role of absorptive capacity can alter the impact of the organizational innovation on
the extent of knowledge transfer. This emphasises the importance of absorptive capacity in
managing knowledge transfer, which necessitates more attention from organisational
structure. This rationale clearly emphasizes the potential influence of knowledge transfer for
nurturing absorptive capacity towards innovation.
H1: Knowledge transfer mediates the relationship between absorptive capacity and
innovation capability in the education industry in Malaysia
H2: Knowledge transfer mediates the relationship between psychological empowerment and
innovation capability in the education industry in Malaysia
Method
Sample and Procedure
The sample size is one aspect of study design that researchers need to remember when they
prepare their research, according to Burmeister, Elizabeth, Aitken, and Leanne (2012).
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Reasons for correctly measuring the necessary sample size include producing both clinically
and statistically meaningful outcomes and ensuring the effective and ethical usage of study
resources. Since the population of UiTM administrative staff in Shah Alam is 2,709 employees,
according to Krejcie and Morgan, (1970) minimum sample size needed is 393. The responses
were obtained from a list of administrative staff in UiTM Shah Alam. The data were analyzed
using the Statistical Package for Social Science 25 (SPSS25). The assumption test was
performed to decide which responses were important based on degrees of consensus to the
different goals.
Measurement of the Variables
The entire variables were measured by using a five-point Likert scale format. Studies have
generally shown that five-to seven-point scales of measurement can improve its reliability
and validity (Mitchell, Van Den Land, and Levy, 2018). Thus, each of the continuous variables
is measured by a five-point Likert Scale.
Results and Discussion
Demographic
The descriptive analyses of respondents' demographic data where are also carried out by the
researcher using SPSS. Gender, age, marital status, educational level, and employment base
are all factors to consider. The analyses as in the Table 1 below.
Table 1: Demographic
Demographic Variable
Categories
Percentage (%)
Gender
Male
Female
44.8
55.2
Age
Less than 30 years
30 40 years
40 50 years
50 years and above
22.1
51.9
16.3
9.7
Marital Status
Single
Married
Others
27.5
72.0
0.5
Education Level
PMR
SPM
STPM
Diploma
Degree
Masters
PHD
1.5
26.5
3.6
22.6
28.2
16.5
1.0
Employment Basis
Full time
Part time
Contract
Internship
89.3
2.8
2.5
5.3
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Descriptive Statistic
Researcher used two modes to measure variability which is Mean and Standard Deviation
(SD). For the independent and mediating variables of absorptive capacity, knowledge
transfer, and psychological empowerment used. Individual/ respondent generally choose
from five alternative which is range from 1 to 5, with 1 strongly disagree, 2 disagree, 3
indicating neutrality, 4 agree, and 5 strongly agree. Same goes to dependent variables
innovation capability also used Likert scale as 1 to 5 to measure their range. Results in Table
2 indicates that the mean score for the dependent variable which is Innovation is 3.658
indicating a high mean score. While independent and moderating variables which are
absorptive capacity, knowledge transfer and psychological empowerment also indicating a
high mean score of 3.438, 4.183 and 4.022 respectively. Further, standard deviation of all
value can also be considered as acceptable.
Table 2: Descriptive
Variables
Mean (M)
Standard
Deviation (SD)
Absorptive Capacity
3.438
0.604
Knowledge Transfer
4.183
0.501
Psychological Empowerment
4.022
0.742
Innovation
3.658
0.683
Hypotheses Testing
PROCESS macro-Hayes for H1
The mediation analysis, Andrew Hayes's PROCESS macro, was used to examine the effect of
absorptive capacity (X-variables) on the innovation capability (Y-variable) mediates by
knowledge transfer (W-variable) to analyse the first hypothesis of this study. The results of
the analysis are explained further below in details. The results in Table 3 shows that F (3, 92)
= 58.771, p < .001, R2 = .657. This meant that 65.7% of the variance was due to knowledge
transfer.
Table 3: Model Summary using Andres Hayes’s PROCESS Macro
R
R
Square
MSE
F
dfl
dfl2
p
1
.8106
.657
.555
58.771
3.000
92.000
0.000
Table 4: Result of PROCESS macro-Hayes for H1
Variable /
Effect
b
Se
t
p
95% Confidence Interval
AC
I
.0426
.2190
.1946
> .001
.477
.391
AC
KT
.0529
.0547
.9669
> .05
.056
.161
AC
KT
I
.0048
.0234
.2740
.000
.042
.051
*AC: Absorptive Capacity; KT: Knowledge Transfer; I: Innovation
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Table 5: Effects
Direct
.0529
.0547
.9669
<.05
.0555
.1613
Indirect
.0002
.0047
.0128
.0077
Total
.0527
.0545
.9674
.00
.0552
.1606
Based on the Table 4, first, the results of the regression analysis show that independent
variable, absorptive capacity was not a significant predictor of innovation capability (b =
.0426, t = .1946, p > .001). Next, while controlling for knowledge transfer (mediator), the
results of the second regression analysis also show that the independent variable, absorptive
capacity was not significant predictor of knowledge transfer (b = .0529, t =.9669, p > .05).
However, when mediator was included, the relationship between absorptive capacity and
innovation capability is significant (b = .0048, t =.2740, p = .000).
Moreover, in Table 5, there was also statistically insignificant direct effect between absorptive
capacity and innovation capability (b = .0529, t = .0547, p < .05). However, the results of the
indirect effect based on 5000 bootstrap samples show a significant indirect relationship
between absorptive capacity and innovation capability mediate by knowledge transfer (a*b =
.0002, Bootstrap = .0128 and .0077). Thus, it can be concluded that H1: Knowledge transfer
mediates the relationship between absorptive capacity and innovation capability in the
education industry in Malaysia is accepted.
PROCESS macro-Hayes for H2
The mediation analysis, Andrew Hayes's PROCESS macro, was used to examine the effect of
psychological empowerment (X-variables) on innovation capability (Y-variable) mediates by
knowledge transfer (W-variable) to analyze the second hypothesis of this study. The results
of the analysis are explained further below in details. The results in Table 6 shows that F (3,
92) = 56.66, p < .001, R2 = .757. This meant that 75.7% of the variance was due to knowledge
transfer.
Table 6: Model Summary using Andres Hayes’s PROCESS Macro
R
R Square
MSE
F
dfl
dfl2
p
1
.800
.757
.515
56.661
3.000
92.000
0.000
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Table 7: Result of PROCESS macro-Hayes for H1
Variable /
Effect
b
Se
t
p
95% Confidence Interval
PE
I
.0413
.2091
.1845
> .001
.4667
.3712
PE
KT
.0428
.0546
.9615
> .05
.0565
.1512
PE
KT
I
.0075
.0231
.2787
.000
.0413
.0611
*PE: Psychological empowerment; KT: Knowledge Transfer; I: Innovation
Table 8: Effects
Direct
.0519
.0557
.9719
> .05
.0555
.1613
Indirect
.0003
.0047
.0127
.0078
Total
.0527
.0545
.9674
.000
.0552
.1606
Based on the Table 7, first, the results of the regression analysis show that independent
variable, psychological empowerment was not a significant predictor of innovation capability
(b = .0413, t = .1845, p > .001). Next, while controlling for knowledge transfer (mediator), the
results of the second regression analysis also show that the independent variable,
psychological empowerment was not significant predictor of knowledge transfer (b = .0428, t
=.9615, p > .05). However, when mediator was included, the relationship between
psychological empowerment and innovation capability is significant (b = .0075, t =.2787, p =
.000).
Moreover, results in Table 8 shows that there was also statistically insignificant direct effect
between absorptive capacity and innovation capability (b = .0519, t = .0557, p > .05). However,
the results of the indirect effect based on 5000 bootstrap samples show a significant indirect
relationship between absorptive capacity and innovation capability mediate by knowledge
transfer (a*b = .0003, Bootstrap CI95 = .0127 and .0078). Thus, it can be concluded that H2:
Knowledge transfer mediates the relationship between psychological empowerment and
innovation capability in the education industry in Malaysia is accepted.
Conclusions
As hypothesized, knowledge transfer mediates relationship between both absorptive
capacity, psychological empowerment and innovation capability in Malaysia’s education
sector. Hence, findings from this research are at par with (Cheng & Eric, 2020; Santoro,
Bresciani & Papa, 2020; Wang, Wang & Chang, 2019). Innovation relies heavily on absorptive
capacity and psychological empowerment which upon intersection of knowledge transfer will
further improves the analogy. Knowledge transfer among employees is crucial part in
integrating, exchanging and communicating ideas solutions to meet optimal results as the
increase in connectivity via interaction will promise greater effect of absorptive capacity and
psychological empowerment have direct impact on innovation. It is highlighted in the
research, knowledge transfer mediates the relationship between absorptive capacity,
psychological empowerment and innovation in education industry in Malaysia.
This study provides empirical evidence that knowledge transfer mediates the relationship
between psychological empowerment on innovation capability. To enhance innovation
International Journal of Academic Research in Business and Social Sciences
Vol. 1 2, No. 1, 2022, E-ISSN: 2222-6990 © 2022 HRMARS
1317
capabilities, this study introduces and develops an integrative model that integrates
knowledge-based and social empowerment concepts. Based on researcher findings, the
empowering employees to make decision and weighing their point of view instil another level
of psychological empowerment incorporated with smooth flow of absorptive capacity
predicts better innovation quality. This finding is important as it demonstrates the ground
relationship of innovation for future researchers both in education and industrial fields.
Representation of the mediating role between variables have set new spectrum of
perspectives to alleviates innovation in education department. This research has set new line
relationship which often have been overlooked previously. Finally, assertion of the findings
suggests both education and industrial industry have new breaking point to consider from
now onwards.
Implications
This study provides a number of academic and practical contributions. Knowledge Transfer as
a mediating variable provides a fresh findings and it made a significant contribution to the
research on innovative capability. Both innovation and education institutions should realize
and ensure employees are connected with proper guidance through optimal level of
communication resulting the best of knowledge transfer among them. These aspects are
important in setting the healthy environment for the best outcome possible which impacts
innovation heavily at the end results.
Second, this study also provides guidelines for practitioners, especially in education
institutions. Management must empower employees as it motivates one’s drive and
motivation psychologically. To empower the employees, management must pay more
attention to employees’ knowledge sharing and nurture the realization of their ideas with
open mind to appreciate all ideas from each individual’s. Moreover, organizations especially
education institutions need a good knowledge sharing culture in the work environment as it
lead to better understanding of company’s vision which brings optimal quality to innovation.
Limitations and Suggestions for Future Research
This study contains several limitations and can be further developed in the future. First, one
of the limitations of the cross-section method is that it cannot prove a causal relationship.
Therefore, a longitudinal design is needed, although this will not completely resolve the
difficulty of proving a cause-and-effect relationship (Carmeli & Spreitzer, 2009). Second, this
study conducted in the Malaysian context. The results may be different for employees
working in various cultural, economic, and environmental conditions.
This study gives a novelty for further research to find out the absorptive capacity,
psychological empowerment and knowledge transfer mechanism that is appropriate for other
organizations. Education sectors in Malaysia need to put more focus on psychological
empowerment of employees’ nourishing them with morale support and boosting up
motivation upon completing task which will have direct impact on innovation. Education
industry needs to highlight the importance of absorptive capacity among employees by
providing systematic flow of information in the institutions. Lastly, education industry must
take into consideration power of knowledge transfer as part of the equation to come up with
the best innovation which have been disregarded on previously.
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1318
Acknowledgement
We would like to extend our thanks to the editors and reviewers of the journal, who helped
tremendously in improving the quality of this manuscript. Thanks also to the administrative
staffs at UiTM Shah Alam for facilitating the data collection process for this study.
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