How intellectual capital drives service innovation in Jordanian banks: The role of employee engagement and resilience

Studies indicate that achieving a sustainable competitive advantage requires some degree of innovation. However, the various factors that can influence an organization's innovation capacity, particularly within the Jordanian banking sector, have not been thoroughly investigated. Therefore, this study aims to examine the role of intellectual capital in enhancing innovation in Jordanian banking services, while considering the mediating effects of employee flexibility and employee engagement. This study explored the impact of intellectual capital on innovation in Jordanian banking services through employee flexibility and engagement, using a quantitative research design. achieve the study's objectives, the researchers designed a questionnaire and distributed it randomly to 430 employees in Jordanian banks. The collected data were analyzed using partial least squares structural equation modeling (PLS-SEM) with the assistance of WarpPLS (8.0). The results revealed a significant direct relationship between intellectual capital and innovation, employee engagement, and employee Resilience. These findings indicate that intellectual capital plays a crucial role in strengthening employees’ capabilities that support innovative performance in the banking sector. Similarly, employee engagement was found to have a significant impact on innovation, while employee Resilience had a substantial relationship with both innovation and employee engagement. Furthermore, the study found that employee engagement and resilience play a mediating role in the relationship between intellectual capital and innovation. The study offered several recommendations, most importantly that bank managers should pay attention to intellectual capital in order to sustain innovation and gain a competitive advantage in a highly competitive environment.These results highlight the strategic importance of intellectual capital in improving innovation outcomes and long-term competitiveness in the banking sector.