Intellectual Capital, Financial Performance and Companies’ Sustainable Growth: Evidence from the Korean Manufacturing Industry

By Jian Xu, Binghan Wang. Sustainability, 2018

323 citations recorded by the source corpus.

Intellectual capital (IC) is considered to be a wealth generator and driver of financial performance thus creating competitive advantage and sustainability in business. This paper empirically investigates the impact of IC on financial performance and sustainable growth in the Korean manufacturing industry. Multiple regression models are applied with data collected from 390 manufacturing companies listed on the Korean Stock Exchange during 2012–2016. The results of the analysis show that IC has a positive impact on financial performance and companies’ sustainable growth. In addition, companies’ performance and sustainable growth are positively related to physical capital, human capital (HC), and relational capital (RC). RC is found to be the most influencing factor. Finally, innovative capital captures additional information on structural capital (SC) which negatively affects the performance of Korean manufacturing companies. The results extend the understanding of IC in creating corporate value and building sustainable advantages in emerging economies.

Subfields: Strategy and Management

View Paper: https://www.semanticscholar.org/paper/63577ab50179c24614035a8e4b8280e693e7ab11

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In Strategy and Management

1. Feng Liu
2. Ngoc Phu Tran
3. Duc Hong Vo
4. Jian Xu
5. Weizheng Yu
6. Yue Shang
7. Ionica Oncioiu
8. Camelia Oprean-Stan

Citations in the corpus

• Human capital efficiency and firm performance across sectors in an emerging market (2020, methodology): “In addition, due to its simplicity in the use of available data from financial statements, this model has widely been employed in many empirical studies (Mohammadi & Taherkhani, 2017; Nazari et al., 2007; Phusavat et al., 2011; Xu & Wang, 2018).”
• The Impact of Intellectual Capital on Firm Performance: A Modified and Extended VAIC Model (2020, background): “Similarly, Xu & Wang (2018) also used the same model in the case of South Korea.”
• The Role of a Manager’s Intangible Capabilities in Resource Acquisition and Sustainable Competitive Performance (2019, background): “Moreover, Xu and Wang [21] confirmed that all the dimensions of IC—structural capital, human capital, and relational capital—significantly and positively enhance sustainability, financial performance, and economic growth in the business sector.”
• Intellectual Capital Performance and Profitability of Banks: Evidence from Pakistan (2019, result): “(2019); Yao et al. (2018); and Tan (2016), supporting H10. This result shows that the higher capitalization of Pakistani banks prevents them from excessive external finance cost and thus increases their profitability. Consistent with Haris et al. (2019); Yao et al. (2018) and Tan (2016), this study ”
• Intellectual Capital, Technological Innovation and Firm Performance: Evidence from China’s Manufacturing Sector (2019, background): “Wang [73], taking SMEs as the sample, found that innovativeness is positively related to firm performance.”
• Impact of Sustainability Reporting and Inadequate Management of ESG Factors on Corporate Performance and Sustainable Growth (2020, methodology): “Consistent with previous studies [120,125,126], financial risk, determined by the debt ratio (DR), assessed by the total debt compared to the total assets, was also used as a second control variable.”