Investigating the impact of intellectual capital on financial performance in Indian manufacturing sector

The paper empirically examines the impact of corporate governance on the cash holding of the firms. The components of corporate governance are measured by board size, board meeting, audit committee members, directors remuneration and non executive directors and the cash holding is measured with the log of average cash and size is taken as control variable for the control effect on the dependent variables. Moreover, correlation and panel regression model were employed to examine the relationship between the corporate governance and cash holding. Empirical data was collected from 96 firms over the period of 2004-05 to 2013-14. The results show that directors remuneration and the number of audit committee members positively influence the cash holding and the board size also positively influences the cash holding whereas, the non executive directors and the board meetings do not play any role in enhancing the cash holding.

Download Full-text

Examining the relationship between intellectual capital and financial performance: an empirical study of service and manufacturing sector of India

International Journal of Learning and Intellectual Capital ◽

10.1504/ijlic.2018.095895 ◽

2018 ◽

Vol 15 (4) ◽

pp. 309

Author(s):

Raman Deep Singh ◽

Karam Pal Narwal

Keyword(s):

Empirical Study ◽

Financial Performance ◽

Intellectual Capital ◽

Manufacturing Sector ◽

The Relationship

Download Full-text

WHETHER FDI OR EXPORTS ENHANCE INNOVATION: EVIDENCE FROM INDIAN MANUFACTURING FIRMS, 2001-2012

Revista Galega de Economía ◽

10.15304/rge.26.3.4457 ◽

2017 ◽

Vol 26 (3) ◽

pp. 19-32

Author(s):

Krishan SINGH ◽

Dr. Sandeep Kaur BHATIA

Keyword(s):

Manufacturing Sector ◽

Fixed Effect Model ◽

Manufacturing Firms ◽

Capital Inflows ◽

Public And Private ◽

Effect Model ◽

Foreign Capital Inflows ◽

Indian Manufacturing Sector ◽

Public And Private Sector ◽

The Impact

The economic reforms of 1991 resulted in an increased inflow of FDI into theIndian economy. However, for the invention of new techniques and skills, there is a greatneed to invest on R&D, requires a huge amount of capital, which can be available throughFDI inflows. Technology has been imported in heavy amount after the implementation ofliberalization policies. Therefore, the present study intends to know whether FDIcontributes to the Indian manufacturing sector through R&D or not. The average growthof the manufacturing sector in India (7.93 per cent) has been found considerably higherduring the second decade of reforms (2001-2012) as compared to first decade reforms(1991-2000). In the context of this, the present study has tried to examine the trends andpatterns of FDI and R&D in manufacturing firms of India during the second decade ofreforms (2001-12) and also, to analyze the impact of FDI and exports on R&D inmanufacturing firms of India through fixed effect model. The results suggest that R&D hasbeen significantly impacted by the import of capital goods, foreign equity, disembodiedtechnology, and export intensity during the second decade of liberalization period. Thepresent study suggests that greater approvals for foreign capital inflows are required inIndia, for enhancing the R&D in the manufacturing sector. There must be an appropriatecoordination between public and private sector, which can improve the R&D expenditureof manufacturing firms of India.

Download Full-text

The Effect Of Intellectual Capital On The Financial Performance Of Libyan Banks

European Journal of Business Management and Research ◽

10.24018/ejbmr.2020.5.4.341 ◽

2020 ◽

Vol 5 (4) ◽

Author(s):

Khalad M. S. Alrafadi

Keyword(s):

Financial Performance ◽

Intellectual Capital ◽

Commercial Banks ◽

Positive Relationship ◽

Value Added ◽

Organizational Structures ◽

Private Banks ◽

The Impact

This study examines intellectual capital (IC) performance of Libyan banks during the period from 2004 to 2010, using value-added intellectual coefficient (VAIC) methodology, and investigates the impact of IC on financial performance. It identifies the IC components that may be the drivers of the traditional indicators of bank success. The results of the study showed that private banks are more concerned with the components of intellectual capital compared to commercial banks and specialized banks. The results also showed that there is a positive relationship between the components of the (VAIC) and the (ROA). The study recommended that Libyan banks should add a post or position to manage intellectual capital in their organizational structures to help structure relevant strategies and policies on how to obtain, utilize and develop the best resources required for intellectual capital.

Download Full-text

Trends and relationship among intellectual capital disclosures, patent statistics and firm performance in Indian manufacturing sector

Journal of Intellectual Capital ◽

10.1108/jic-05-2020-0148 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Khushdeep Dharni ◽

Saddam Jameel

Keyword(s):

Firm Performance ◽

Intellectual Capital ◽

Manufacturing Sector ◽

Secondary Data ◽

Data Availability ◽

Content Type ◽

Patent Statistics ◽

Patent Applications ◽

Indian Manufacturing Sector ◽

Increasing Trends

PurposeThis study highlights the trends of qualitative intellectual capital disclosures and patent statistics in the Indian manufacturing context by considering the numerous patent applications, patent grants, forward citations and backward citations. Furthermore, the study investigates the relation among qualitative disclosures, patent statistics and firm performance.Design/methodology/approachAll manufacturing companies of CNX 500 Index of National Stock Exchange of India Limited are considered. Based on data availability, 243 manufacturing firms spanning across seven major manufacturing sectors are included. Secondary data were obtained from the annual report of companies and patent databases from 2004 to 2005 to 2013–2014, generating a sample of 2,430 firm years. Content analysis and citation analysis are used for collecting the relevant data.FindingsOverall, the study results indicated increasing trends for all types of intellectual capital disclosures. Similar trends are observed for patent applications and patent grants, indicating a surge in patenting activities across the manufacturing sector. However, increasing trends in patenting activities are not reflected for forward and backward citations. In addition, significant differences in means and trend coefficients for qualitative disclosures and patent statistics indicated industry specificity within the Indian manufacturing sector. Furthermore, industry specificity is observed when translating intellectual capital to firm performance. The measure of firm performance, that is, Tobin's Q, is having a significant positive association with qualitative disclosures and patent statistics.Research limitations/implicationsAs the study is based on secondary data, its accuracy is limited by the accuracy of the data sources such as the annual reports of companies and patent databases.Practical implicationsThe study findings imply that policymakers should devise and execute sector-specific policy interventions. Moreover, managers and policymakers should emphasize the qualitative aspect of patenting activities.Originality/valueThe study is an original work that highlights the trends in qualitative disclosures in the Indian manufacturing context. The value relevance of intellectual capital and patent statistics has been established.

Download Full-text

Intellectual capital efficiency and market-based financial performance: Evidence from listed conglomerate companies

Corporate and Business Strategy Review ◽

10.22495/cbsrv2i2art4 ◽

2021 ◽

Vol 2 (2) ◽

pp. 31-42

Author(s):

Eniola Ayisat Sulaiman ◽

Abubakar Sadiq Kasum ◽

Wasiu Ajani Musa

Keyword(s):

Financial Performance ◽

Intellectual Capital ◽

Fixed Effects ◽

Value Added ◽

Secondary Data ◽

Lagrangian Multiplier ◽

Fixed Effects Model ◽

Analysis Technique ◽

Capital Efficiency ◽

The Impact

Having observed the rate at which dissimilarity occurs between market and book value, and management ignorance concerning the impact intellectual capital disclosure has on companies’ values spurred the interest to probe the association between the efficiency of value-added intellectual coefficient (VAIC) and market-based financial performance of listed Nigerian conglomerate companies. To accomplish the purpose of this study, secondary data were employed and extracted from annual audited reports of listed conglomerate companies in Nigeria from the period of 2010–2018. The data obtained were subjected to static panel data regression analysis technique. The random-effects model was adopted because the empirical result from Breusch and Pagan Lagrangian multiplier (BP-LM) and Hausman tests chose it over the fixed-effects model to produce better results. This study revealed that the value-added efficiency of capital employed (VACA), value-added efficiency of human capital (VAHU), and value-added efficiency of structural capital (STVA) are the drivers of intellectual capital in the conglomerate sector. This study concluded that elements of intellectual capital have a strong power on market-based financial performance. This study recommends that information on intellectual capital components should be reported in ways they deem fit by developing a model of intellectual capital disclosure that complies with the International Accounting Standard Board (IASB)

Download Full-text

Influence of Intellectual Capital on Performance

International Journal of Human Capital and Information Technology Professionals ◽

10.4018/ijhcitp.2021040104 ◽

2021 ◽

Vol 12 (2) ◽

pp. 53-71

Author(s):

Kanishka Gupta ◽

T. V. Raman

Keyword(s):

Financial Performance ◽

Intellectual Capital ◽

Value Added ◽

Dynamic Panel Data ◽

Return On Assets ◽

Time Period ◽

Panel Data Regression ◽

Data Regression ◽

Developed World ◽

The Impact

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.

Download Full-text