Intellectual Capital and Sustainable Economic Performance in the Public Sector: The Context of the New Public Management in Malaysia

The New Public Management allows us to reflect upon whether intellectual capital helps public sector organizations meet their performance benchmarks. Sustainable economic performance gains importance from the public sector’s service ideal. Although there have been empirical endeavors using intellectual capital as operational variables, this study examines the theoretically informed relationship between the intellectual capital construct and its construct dimensions and the sustainable economic performance construct and its construct dimensions. The decision-making inputs of senior officials in the Malaysian public sector are vital for evaluating the relationship, as these officials are the individual strategists of the collective organizational strategy. The study conducted a survey that received 1,092 usable responses and analyzed them using the structural equation modelling research method. The findings showed a robust theoretical relationship between intellectual capital and sustainable economic performance. Furthermore, the study identified intellectual capital items that play a vital role in supporting public sector sustainable economic performance in Malaysia under New Public Management. The findings provide useful knowledge for public sector officials and policymakers, and for further research.