How do knowledge management resources and capabilities pay off in short-term and long-term?

Abstract

How sustainable are the financial payoffs obtained from knowledge management (KM) resources and capabilities? To illuminate this issue, we use multiyear, firm-level survey data, as basis in examining the extent to which KM resources and capabilities influence a firm’s financial performance over time. The findings suggest that the impact of KM capability on firm performance is more pronounced in the long term than in the short term. By contrast, knowledge management systems (KMS) is associated only with immediate, short-term financial benefits with such gains prone to instability in the long term. Interestingly, knowledge stock (KS) in and of itself exerts neither short-term nor long-term impacts on a firm’s performance. However, both KMS and KS indirectly affect a firm’s long-term performance by virtue of KM capability.