Modelling the Impact of Knowledge Management on Financial Performance

Abstract

Research Question: This study seeks to identify and analyze the key factors that contribute to the positive impact of knowledge management on the financial performance of enterprises. Motivation: Understanding how organizations that implement knowledge management strategies achieve improvements in financial performance is crucial. Although the link between knowledge management and financial success is often discussed, specific factors influencing this relationship remain underexplored, particularly in the context of Serbia. The goal is to address this gap and provide a model that links these two elements. Idea: The core idea of this research is to develop and test a model that illustrates how knowledge management dimensions influence financial performance in enterprises. Data: Data were collected through a survey of 126 middle and upper management employees from both public and private enterprises in Serbia. The independent variable is measured by an instrument assessing nine dimensions of knowledge management, while the dependent variable is financial performance, assessed through seven specific items. Tools: Multiple linear regression analysis was applied to determine the relationship between knowledge management dimensions and financial performance. Findings: The results indicate a significant positive influence of the dimensions of knowledge management on financial performance. The developed model highlights both the positive and negative effects of these dimensions, offering a comprehensive view of how knowledge management drives financial outcomes. Contribution: This study contributes to the existing literature by offering a model that explains the impact of knowledge management on financial performance. The model serves as a foundation for future research and can encourage the development of strategies to increase business outcomes through knowledge management.