Purpose – The purpose of this paper is to examine whether intellectual capital (IC) creates value in the Serbian information communication technology (ICT) sector. More specifically, it examines the degree to which IC and its key components affect the financial performance of selected ICT companies compared to effects on physical and financial capital. Design/methodology/approach – The analysis included 13,989 Serbian ICT companies during 2009-2013. Value-added intellectual coefficient (VAIC) was used to measure the level of IC contribution to value creation. Measures of financial performance used in the study were return on equity, return on assets, return on invested capital, profitability, and asset turnover. Findings – Results indicate that, when using firm size and leverage as control variables, only capital-employed efficiency has significant effect on financial performance. Finally, the research confirms that there were no significant differences in financial performance among different ICT subsect...

Intellectual capital and financial performance in the Serbian ICT industry

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.

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

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).,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.,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.,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.,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.

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

The purpose of this paper is to propose an extended and modified value-added (VA) intellectual coefficient (VAIC) model, which includes intellectual capital (IC) components which were missing in the original VAIC approach. The proposed model has been used to explore the relationship between IC and firm performance for Turkish manufacturing firms on a more detailed level.,Multiple regression analysis has been employed to identify the IC components, which predict the performance of the firm and the moderating effect of some IC components on IC components–firm performance relationship. Data are required to calculate the IC components, and firm performance variables have been obtained from the financial reports of the Turkish manufacturing firms for the period 2003–2013.,According to the results for Turkish manufacturing sector innovation capital efficiency has a moderating effect on the relationship between structural capital efficiency (SCE) and profitability, meaning, depending on an increase in R&D expenses, the effect of SCE on profitability also increases. On the other hand, it has been found that innovation capital efficiency has a direct impact on firms’ productivity. The results also showed that IC efficiency components have a moderating role on the relationship between capital employed efficiency and profitability.,There might be a time lag until the effect of R&D investments can be observed in firms’ performance. However, this lagged impact of innovation capital and also other IC components on future firm performance has not been investigated due to concerns related to sample size.,The proposed model differs from the original VAIC model in three ways: it, namely, includes two additional IC components, customer capital (CC) and innovation capital. It explores the moderating effect of innovation capital on structural capital–firm performance relationship and the moderating effect of IC components on employed capital–firm performance relationship. As the last difference, it proposes an alteration in the VA calculation due to newly added IC components, CC and innovation capital.

Intellectual capital and firm performance: an extended VAIC model

Purpose – The purpose of the present study is to make a comparison of intellectual capital performance between Indian pharmaceutical and textile industry. Further, the study attempts to investigate association between intellectual capital efficiency with financial performance and market valuation.Design/methodology/approach – An empirical study was carried out on data collected from CMIE database Prowess. VAIC was calculated on a select sample of 105, pharmaceutical companies and 102, textile companies. Correlation and OLS regressions models are used on panel data for the analysis.Findings – Results indicated that profitability and intellectual capital are positively associated but no significant relationship is observed between intellectual capital with productivity and market valuation in both industries. In spite of the growing importance of intellectual capital, its reflection is not proportionally observed in the financial performance of the select sample of companies.Research limitations/implication...

IC performance of Indian pharmaceutical and textile industry

Purpose – The purpose of this paper is to study the relationship between intellectual capital (IC) and performance of pharmaceutical firms in India. The secondary objective is to propose and test modified models of Value Added Intellectual Coefficient (VAIC™) method. Design/methodology/approach – Data on 22 large pharmaceutical firms collected for empirical investigation. Return on assets and return on sales are performance variables. IC and its components – human capital, structural capital and relational capital (RC), are predictor variables. Three extended and modified VAIC™ models (e-VAIC™) are proposed. Multiple regression technique is applied on pooled data to draw inferences. Findings – Results show instances of positive relationship between IC and performance variables. RC, the new variable, does not demonstrate statistically significant relationship with performance variables. Research limitations/implications – Due to inadequate reporting of IC and its components, availability of data on various...

Intellectual capital and performance of pharmaceutical firms in India

Measurement of intellectual capital efficiency and its impact on the financial performance of companies is a commonly researched domain. A significant section of researchers have used the Value Added Intellectual Coefficient (VAIC™) model – an accounting data-based measurement model, for this purpose. However, the contemporary literature criticises this model for non-inclusion of relational capital and perfect interdependency between intellectual capital components. This study addresses these shortcomings by presenting an extended and modified version of the VAIC™ model. Relational capital has been added as a new variable. This new model has been tested on the healthcare firms of India. A comparative analysis of the two models has also been done. Regression results do not encourage the inclusion of relational capital in VAIC™. During comparative study, the coefficient of determination values suggest that the proposed model may be preferred over VAIC™ for all the three performance variables – return on assets, return on equity and return on sales. These findings have academic as well as practical implications.

Performance of intellectual capital in Indian healthcare sector

In their endeavor to sustain high level of economic growth rate, emerging economies are prone to financial distress and bourgeoning indebtedness. Exceeding reliance on foreign investments exposes to the risk of growth rate fluctuations. GDP-Indexed Bonds have been proposed as an instrument to hedge against debt trap, growth rate fluctuations and external economic turbulences. Return on these bonds is in direct relationship with GDP growth rate. The economic growth rate impacts interest rates as well, thereby affecting the returns on vanilla bonds.  Anticipating a correlation between returns on GDP-Indexed bonds and plain vanilla bonds, monthly data has been collected on GDP growth rate and 10-Year bond yield to determine the strength of association between the two types of bonds. Furthermore, this study explores the hedging possibilities for investors and comments upon the utility of GDP-indexed bonds in Indian context. The results may find use with large corporations, pension funds and overseas investors. Keywords: interest rate, economic growth rate, GDP-indexed bond, vanilla bond

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Sriranga Vishnu

Papers

Intellectual capital and performance of pharmaceutical firms in India

Performance of intellectual capital in Indian healthcare sector

Discussion on Feasibility of GDP-Indexed Bonds in Emerging Economies –Viewpoint India