The impact of intellectual capital on firm performance: a study of Indian firms listed in COSPI

By Neha Smriti, N. Das. Journal of Intellectual Capital, 2018

270 citations recorded by the source corpus.

Purpose The purpose of this paper is to examine the effect of intellectual capital (IC) on financial performance (FP) for Indian companies listed on the Centre for Monitoring Indian Economy Overall Share Price Index (COSPI). Design/methodology/approach Hypotheses were developed according to theories and literature review. Secondary data were collected from Indian companies listed on the COSPI between 2001 and 2016, and the value-added intellectual coefficient (VAIC) of Pulic (2000) was used to measure IC and its components. A dynamic system generalized method of moments (SGMM) estimator was employed to identify the variables that significantly contribute to firm performance. Findings Indian listed firms appear to be performing well and efficiently utilizing their IC. Overall, human capital had a major impact on firm productivity during the study period. Furthermore, the empirical analysis showed that structural capital efficiency and capital employed efficiency were equally important contributors to firm’s sales growth and market value. The growing importance of the contribution of IC to value creation was consistently reflected in the FP of these Indian companies. Practical implications This study has robust theoretical grounds and employs a validated methodology. The present study extends knowledge of IC among academicians and managers and highlights its contribution to value creation. The findings may help stakeholders and policymakers in developing countries properly reallocate intellectual resources. Originality/value This study is the first study to evaluate IC and its relationship with traditional measures of firm performance among Indian listed firms using dynamic SGMM and VAIC models.

Subfields: Accounting, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/59096acc17f3cf0896fd065ed0b56f3285768d1f

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In Accounting

1. Ngoc Phu Tran
2. Jian Xu
3. Feng Liu
4. Duc Hong Vo
5. Binghan Wang

In Economics and Econometrics

1. Ngoc Phu Tran
2. Feng Liu
3. Duc Hong Vo
4. Binghan Wang
5. Jian Xu

In Strategy and Management

1. Feng Liu
2. Ngoc Phu Tran
3. Duc Hong Vo
4. Jian Xu
5. Binghan Wang

Citations in the corpus

• Human capital efficiency and firm performance across sectors in an emerging market (2020, methodology): “Smriti and Das (2018) examined the impact of intellectual capital on financial performance at 710 Indian companies from 2001 to 2016.”
• Intellectual Capital, Financial Performance and Companies’ Sustainable Growth: Evidence from the Korean Manufacturing Industry (2018, background): “This provides evidence for H4, consistent with the findings of Smriti and Das [13] and Chen et al. [21] who stated that IC has a positive impact on revenue growth.”
• The Impact of Intellectual Capital on Firm Performance: A Modified and Extended VAIC Model (2020, methodology): “The original VAIC model ignores the firm’s RC and innovation capital (Ståhle et al., 2011; Smriti & Das, 2018).”