The Relationship between Intellectual Capital and Corporate Performance in Chinese Bio-pharmaceutical Industry

PurposeConsensus on how intellectual capital (IC) affects corporate performance is limited because of various measurement models of IC and corporate performance. This study thus aims to further the debate on the relationship between IC and corporate performance from the perspectives of nonlinearity, the capital values of IC and the use of a holistic measure of corporate performance.Design/methodology/approachUsing 1,395 firm-year observations derived from Vietnamese listed companies from 2010 to 2018, this study focuses on (1) presenting an IC model benchmarked on value-creating expenses; (2) using a directional distance function (DDF)-based stochastic nonparametric envelopment of data (StoNED) framework to scrutinize multiple performance indicators and the capital values of people, structures and relationships simultaneously; and (3) adopting firm-year cluster-robust regressions to analyze the nonlinear association between IC and corporate performance empirically with an appropriate U test.FindingsResults suggest that human capital (HC), structural capital (SC) and relational capital (RC) are the main contributors of high corporate efficiency, whereas only HC and RC contribute to high corporate profitability. These results are absent when this study employs the conventional data envelopment analysis (DEA), which is also a multidimensional framework, as the dependent variable. More importantly, IC and its components can improve corporate performance, namely, both corporate efficiency and corporate profitability up to a critical point, after which the effects would drop.Practical implicationsOverall, this study highlights not only the need to invest in IC but also its associated costs. That is, policymakers also need to note the marginal cost of investing in IC, which may in the end outweigh the benefits from IC.Originality/valueThis study extends IC-related studies by investigating the nonlinear relationship between IC and corporate performance. Moreover, the value of this study also lies in the multidimensional DDF-based StoNED framework.

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Impact of intellectual capital on corporate performance: evidence from the Arab region

Journal of Intellectual Capital ◽

10.1108/jic-01-2017-0014 ◽

2017 ◽

Vol 18 (4) ◽

pp. 884-903 ◽

Cited By ~ 38

Author(s):

Vladimir Dzenopoljac ◽

Chadi Yaacoub ◽

Nasser Elkanj ◽

Nick Bontis

Keyword(s):

Intellectual Capital ◽

Corporate Performance ◽

Market Performance ◽

Value Added ◽

Physical Capital ◽

Publicly Traded ◽

Content Type ◽

Capital Efficiency ◽

The Impact ◽

The Relationship

Purpose The purpose of this paper is twofold: first, to fill a gap in the intellectual capital (IC) literature by providing insights into the relationship between IC and corporate performance among Arab companies and second, to challenge the validity of the Value Added Intellectual Coefficient (VAIC) as a measure of IC’s contribution to performance. Design/methodology/approach The research sample included 100 publicly traded Arab companies selected by Forbes Middle East and ranked as top performers in terms of sales, profits, assets, and market value. The methodology included assessing the impact of IC components on company earnings, profitability, efficiency, and market performance for the period between 2011 and 2015. Research hypotheses were tested through the presentation of descriptive statistics, normality tests, correlation matrix, and multiple regression models. Findings The research yielded ambiguous results. Earnings and profitability were significantly affected by structural and physical capital; efficiency was determined primarily by physical capital; and market performance was mainly influenced by human capital. Research limitations/implications The main limitation of the research comes from disadvantages of VAIC as the measure of IC’s contributions to performance. Originality/value The paper fills a void in the study of IC and corporate performance among Arab companies.

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The mediating role of intellectual capital in corporate governance and the corporate performance relationship

International Journal of Ethics and Systems ◽

10.1108/ijoes-03-2020-0022 ◽

2020 ◽

Vol 36 (4) ◽

pp. 531-561

Author(s):

Tamer Mohamed Shahwan ◽

Mohamed Mahmoud Fathalla

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Intellectual Capital ◽

Corporate Performance ◽

Superior Performance ◽

Operating Efficiency ◽

Efficiency Ratio ◽

Content Type ◽

The Impact ◽

The Relationship

Purpose This paper aims to investigate the impact of intellectual capital (IC) as a mediator variable on the association between corporate governance (CG) practices and firm performance. This study also examines bi-causality linkages between these variables. Design/methodology/approach The designated corporate governance index and the value-added intellectual coefficient method were used to assess the level of CG practices and the performance of IC. Tobin’s Q (TQ) and operating efficiency ratio were used to measure firm performance. Findings The aggregate CG score has a significant positive impact on the IC and the two measures of firm performance. However, the IC has only a partial mediation effect on the relationship between the aggregate corporate governance score and a firm’s operational efficiency ratio. The IC has partial and full mediation effects in the relationship between the sub-dimensions of corporate governance and the performance of Egyptian corporates. Moreover, a bi-causality relationship can be observed between CG and TQ. Research limitations/implications Generalizing the obtained results would require the sample size to be extended. Practical implications The findings should alert legislative institutions and practitioners of the need to comply with good CG practices and develop the efficiency of IC to elicit a firm’s superior performance. Originality/value This study is one of the first attempts to investigate the causality relationships and the mediation impact of IC on the relationship between CG practices and corporate performance in the Egyptian context.

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Intellectual capital and corporate performance in Iranian pharmaceutical industry

Journal of Intellectual Capital ◽

10.1108/14691931211196259 ◽

2012 ◽

Vol 13 (1) ◽

pp. 138-158 ◽

Cited By ~ 55

Author(s):

Gholamhossein Mehralian ◽

Ali Rajabzadeh ◽

Mohammad Reza Sadeh ◽

Hamid Reza Rasekh

Keyword(s):

Pharmaceutical Industry ◽

Intellectual Capital ◽

Corporate Performance

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A critical review of the relationship between human capital management and corporate performance

Corporate Ownership and Control ◽

10.22495/cocv9i3c4art1 ◽

2012 ◽

Vol 9 (3) ◽

pp. 409-427

Author(s):

Pina Puntillo

Keyword(s):

Human Capital ◽

Empirical Evidence ◽

Intellectual Capital ◽

Critical Review ◽

Management Practices ◽

Corporate Performance ◽

Capital Management ◽

Human Capital Management ◽

The Impact ◽

The Relationship

The Human Capital (HC) is considered a strategic resource intangible for companies whose main features are the ability to be self-generated is to be subjected to the risk of a sudden evaporation in the presence of inadequate management practices. After analyzing the concept of human capital as a subset of the most important intellectual capital, research focuses on the determinants of human capital management on corporate performance. Specifically we will look at the literature that has produced empirical evidence on the impact that the practices of management of human capital, the behaviors of the staff, the remuneration and the formation of the staff have on performance.

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Exploring the relationship between the knowledge creation process and intellectual capital in the pharmaceutical industry

The Learning Organization ◽

10.1108/tlo-07-2013-0032 ◽

2014 ◽

Vol 21 (4) ◽

pp. 258-273 ◽

Cited By ~ 22

Author(s):

Gholamhossein Mehralian ◽

Jamal A. Nazari ◽

Peyman Akhavan ◽

Hamid Reza Rasekh

Keyword(s):

Human Capital ◽

Pharmaceutical Industry ◽

Intellectual Capital ◽

Knowledge Creation ◽

Strong Support ◽

Equation Modeling ◽

Research Model ◽

Content Type ◽

Seci Model ◽

The Relationship

Purpose – This paper aims to explore the relationship between knowledge creation and intellectual capital (IC) through an empirical study in the pharmaceutical industry. In the current economy, knowledge and IC are considered as the most important organizational assets and are the key resources in gaining competitive advantage. Design/methodology/approach – This paper adopts the socialization, externalization, combination and internalization (SECI) model to examine the format of knowledge creation processes (KCP) and uses a model to demonstrate the relationship between KCP and IC and its components in the pharmaceutical industry. A valid instrument was adopted to collect the required data on KCP and and IC dimensions. Structural equation modeling was used to assess the measurement model and to test the research hypotheses using the data collected from 470 completed questionnaires. Findings – The results supported the research model and revealed that KCP has significant influence on the accumulation of human capital. The performance of human capital manifests significant impact on structural capital and relational capital. Practical limitations/implications – Given the strong association between KCP and IC, managers should define their own robust operations for knowledge creation to improve their IC accumulation. Originality/value – This research departs from the earlier research on KCP–IC by adopting the SECI model and a research model that facilitates the exploration of the relationship between KCP and IC dimensions in the pharmaceutical industry. The research results provided strong support for the KCP–IC relationship.

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