ISSN: 04532198 Volume 62, Issue 09, October, 2020 5293 Dynamic Capabilities and Intellectual Capital: Developing New Quantitative Research Instrument Mostafa A. Ali 1* , Nazimah Hussin 2 , Ibtihal A. Abed 3 Azman Hashim International Business School, University Technology Malaysia, Kuala Lumpur, Malaysia 1*,2,3 Corresponding author: 1* ABSTRACT— Recent studies suggest a potential relationship between intellectual capital, dynamic capabilities and innovation performance in achieving a successful business. The contribution of dynamic capabilities to innovation performance remains unclear and at the center of the debate. Based on a systematic literature review, the purpose of this research is to develop a tool for measuring the relationship between intellectual capital and dynamic capability toward better innovation performance. Relatively, the research instrument was a questionnaire of 48 questions classified according to the study variables. The distributed samples of the questionnaire were 55, whereas 44 samples returned for analysis in comparison to Cronbach's Alpha. The study found that the instrument designed to measure intellectual capital has shown a positive outcome. Based on the scores aforementioned, the instrument of this study has shown high levels of reliability. Most of the measurements demonstrate that the existence of a high tendency for the usability of dynamic capabilities in enhancing intellectual capital for better innovative performance. Lastly, the most promising approach seems to be indirect, as it appears that dynamic capabilities primarily causes change and intermediate outcomes, though far from being the most hypothesizes relationship. KEYWORDS: Sensing, Seizing, Reconfiguring, Culture, Trust, Human Capital, Structural Capital, Relational Capital, Social Capital. 1. INTRODUCTION The financial crises experienced in recent years have brought about much economic depression in industrialiser countries since the Second World War. As a result, many banks have gone bankrupt while some survive on a government bailout, leading to a significant loss of firms' profits and share value due to defaults on loans. It also caused higher unemployment and increased public debts [1]. Many banks were unable to provide financial services for its customers in all types of banking activities. In this concern, shareholders, staff, and customers have considered innovation as a new way of wealth creation by owing to its significant role in improving the efficiency of firms [2], [3]. Considering various levels of competition and environmental uncertainty, it has become necessary to focus on innovative solutions as the modern method to grow and survive in the banking sector [4], [5]. Some interruption is noticed when describing the definition of intellectual capital which is viewed as non-material resources on a broader context, shaping its reporting, significance, elements, and dealing. For example, describing complete items, understood by the people in an organization, and help them to achieve sur-petition [6] are known as a firms' data value [7]. Many scholars considered intellectual capital knowledge as intellectual property facts and figures, and institutional experiences [8], [9]. Intellectual capital may be used to achieve wealth by expanding business assets side by side with improving employees ' awareness, skills, and perceptions as non-sensorial and intangible properties [10]. The definition of the intellectual capital differed in terms of its scale. Therefore, a s an organization’s information, intellectual capital may be used to generate extra advantages or overall items, understood by the citizens in a company, in other words, to achieve sur- petition. Though, [11] discussed the probability of formalizing, controlling, and enabling intellectual content to generate more valuable properties.