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Influence of Intellectual Capital on Performance: An Analysis of IT and Pharmaceutical Firms

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  • Kanishka Gupta

    (Symbiosis International University (Deemed), Pune, India)

  • T. V. Raman

    (Amity University, Noida, India)

Abstract

Intellectual capital (IC) has gained recognition in enhancing the firms' value and gain a competitive advantage in the developed world. The present study examines the impact of IC on firms' financial performance. The study takes 48 companies for the time period of 10 years (2009-2018). The paper has used modified Pulic's value added intellectual coefficient (VAIC) as a proxy to measure IC and return on assets (ROA) to measure firms' financial performance. Granger causality between all the components of IC and ROA has been tested using Dumitrescu-Hurlin test. To analyse the impact, correlation and dynamic panel data regression technique has been applied. The result indicates that overall intellectual capital, human capital, relational capital, process capital, and financial capital have a significant impact on financial performance. On the other hand, innovation capital has no significant relationship with firms' financial performance. The results are helpful for managers, policymakers, government, and investors so that they can properly manage and regulate the IC of their organization.

Suggested Citation

  • Kanishka Gupta & T. V. Raman, 2021. "Influence of Intellectual Capital on Performance: An Analysis of IT and Pharmaceutical Firms," International Journal of Human Capital and Information Technology Professionals (IJHCITP), IGI Global, vol. 12(2), pages 53-71, April.
    • Handle: RePEc:igg:jhcitp:v:12:y:2021:i:2:p:53-71
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    Cited by:

    1. Md. Mominur Rahman & Bilkis Akhter, 2021. "The impact of investment in human capital on bank performance: evidence from Bangladesh," Future Business Journal, Springer, vol. 7(1), pages 1-13, December.
    2. Mário Nuno Mata & José Moleiro Martins & Pedro Leite Inácio, 2024. "Collaborative Innovation and Absorptive Capacity as an Antecedent on IT Firm Financial Performance," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 6339-6361, June.
    3. María del Carmen Peces & María Amalia Trillo, 2023. "Relational Capital in the Technology Sector: An International Strategic Model," Sustainability, MDPI, vol. 15(5), pages 1-18, February.

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