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Testing the relationship between intellectual capital and a firm's performance: an empirical investigation regarding financial industries of Pakistan

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  • Muhammad Ahmad
  • Naveed Ahmed

Abstract

The purpose of this study is to investigate the intellectual capital (IC)'s performance and its impact on the financial performance of 78 listed financial industries of Pakistan from 2008 to 2013. VAIC™ model is applied to measure the efficiency of IC and its components. The empirical results obtained from the study clearly indicate that IC is an important determinant of the financial efficiency of the Pakistani financial firms. However, when IC is divided into parts, the performance of human capital plays a significant role. As a whole, all companies have relatively higher human capital performance than structural and tangible capital efficiencies. This study makes a valuable addition in the literature by selecting all the financial sectors of Pakistan (banks, life and non-life insurance firms, modaraba firms, mutual fund firms and leasing firms) to investigate the intellectual capital-performance relationship as the previous researchers focused only on one or two financial sectors.

Suggested Citation

  • Muhammad Ahmad & Naveed Ahmed, 2016. "Testing the relationship between intellectual capital and a firm's performance: an empirical investigation regarding financial industries of Pakistan," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 13(2/3), pages 250-272.
    • Handle: RePEc:ids:ijlica:v:13:y:2016:i:2/3:p:250-272
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    Citations

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    Cited by:

    1. Nadezhda N. Pokrovskaia & Olga N. Korableva & Lucio Cappelli & Denis A. Fedorov, 2021. "Digital Regulation of Intellectual Capital for Open Innovation: Industries’ Expert Assessments of Tacit Knowledge for Controlling and Networking Outcome," Future Internet, MDPI, vol. 13(2), pages 1-28, February.
    2. Muhammad Anwar & Sher Zaman Khan & Najib Ullah Khan, 2018. "Intellectual Capital, Entrepreneurial Strategy and New Ventures Performance: Mediating Role of Competitive Advantage," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 10(1), pages 63-94, March.
    3. Yuqiu Lu & Guowei Li & Zhe Luo & Muhammad Anwar & Yunju Zhang, 2021. "Does Intellectual Capital Spur Sustainable Competitive Advantage and Sustainable Growth?: A Study of Chinese and Pakistani Firms," SAGE Open, , vol. 11(1), pages 21582440219, February.
    4. Syed Mir Muhammad Shah & Umair Ahmed & Abdussalaam Iyanda Ismail & Soleman Mozammel, 2021. "Going Intellectually Green: Exploring the Nexus between Green Intellectual Capital, Environmental Responsibility, and Environmental Concern towards Environmental Performance," Sustainability, MDPI, vol. 13(11), pages 1-22, June.
    5. Hongxing Yao & Muhammad Haris & Gulzara Tariq & Hafiz Mustansar Javaid & Muhammad Aamir Shafique Khan, 2019. "Intellectual Capital, Profitability, and Productivity: Evidence from Pakistani Financial Institutions," Sustainability, MDPI, vol. 11(14), pages 1-30, July.
    6. Muhammad Haris & HongXing Yao & Gulzara Tariq & Ali Malik & Hafiz Mustansar Javaid, 2019. "Intellectual Capital Performance and Profitability of Banks: Evidence from Pakistan," JRFM, MDPI, vol. 12(2), pages 1-26, April.
    7. Muhammad Ahmad & Rohani Mohd Rus, 2021. "Intellectual Capital and Firm Performance across Pakistani Industries," Business and Economic Research, Macrothink Institute, vol. 11(4), pages 56-77, December.
    8. Atta Ullah & Chen Pinglu & Saif Ullah & Ningyu Qian & Mubasher Zaman, 2023. "Impact of intellectual capital efficiency on financial stability in banks: Insights from an emerging economy," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1858-1871, April.
    9. Umer Ayub & Abdul Rashid Kausar & Mubashar Majeed Qadri, 2017. "Linking Human Capital and Organisational Innovative Capabilities of Financial Institutions: Evidence from a Developing Country of South Asia," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 16(04), pages 1-23, December.
    10. Chao Hung Wang & Wei‐Jr Juo, 2021. "An environmental policy of green intellectual capital: Green innovation strategy for performance sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 3241-3254, November.

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