바로가기메뉴

본문 바로가기 주메뉴 바로가기

logo

  • P-ISSN2765-6934
  • E-ISSN2765-7027
  • KCI

Intellectual Capital and Corporate Sustainable Growth: The Indian Evidence

Asian Journal of Business Environment / Asian Journal of Business Environment, (P)2765-6934; (E)2765-7027
2019, v.9 no.2, pp.5-15
Tutun Mukherjee (The University of Burdwan West Bengal)
Som Sankar Sen (The University of Burdwan West Bengal)

Abstract

Purpose - The present study endeavours to investigate the impact of intellectual capital (IC) and its components on corporate sustainable growth in India. In addition, this study aims to find out the most influential component of IC on corporate sustainable growth in India. Research design, data, and methodology - A sample size of top 139 NSE listed non-financial companies over a time period of five years has been used in this monograph. The impact of intellectual capital and its components on corporate sustainable growth has been examined using the longitudinal data analysis technique. Results - The findings of this study bring to light that intellectual capital (IC) as measured by the M-VAIC model demonstrates a significant impact on corporate sustainable growth. Considerably, the results also reveal that almost all the explanatory variables viz. Physical Capital, Relational Capital, Innovation Capital, and Process Capital exercise notable influence in explaining corporate sustainable growth. Moreover, the results demonstrate Innovation Capital (controlling the effect of Physical Capital) represents the most influential component of IC on corporate sustainable growth. Conclusions - The research findings show that in the Indian context, both physical capital, and IC (overall), as well as its components, play a crucial role to explain corporate sustainable growth.

keywords
Intellectual Capital, Components of IC, Corporate Sustainable Growth, Control Variables, Longitudinal Data Analysis, India.

Reference

1.

Ahangar, R. G. (2011). The Relationship between Intellectual Capital and Financial Performance: An Empirical Investigation in an Iranian Company. African Journal of Business Management, 5(1), 88-95.

2.

Aji, R. H. S., & Kurniasih. (2015). The Intellectual Capital Effect on Financial Performances at Islamic Insurance. Al-Iqtishad, 7(2), 181-196.

3.

Ali, I., & Ali, J. F. (2012). Intellectual Capital and Organizational Performance. Doctoral dissertation. Retrieved from http://saicon2011.ciitlahore.edu.pk/11-1314%20imran%20ali.pdf

4.

Arifin, J. (2016). Corporate Governance and Intellectual Capital on Financial Performance of Bank Sector Companies: Indonesia Stock Exchange 2008-2012. Journal of Administrative Sciences and Policy Studies, 4(1), 61-82.

5.

Ataünal, L., Gürbüz, A. O., & Aybars, A. (2016). Does High Growth Create Value for Shareholders? Evidence from S&P 500 Firms. European Financial and Accounting Journal, 11(3), 25-38.

6.

Avci, E., & Nassar, S. (2017). Intellectual Capital and Its Impact on Firm Performance of the Turkish Financial Sector before and after Financial Crisis (Vol. 3, 916-924). Paper presented at the Global Business Research Congress (GBRC), Turkey, 2017. Istanbul, Turkey:Press Academia Procedia (PAP).

7.

Basuki, B., & Kusumawardhani, T. (2012). Intellectual Capital, Financial Profitability, and Productivity: An Exploratory Study of the Indonesian Pharmaceutical Industry. Asian Journal of Business and Accounting, 5(2), 41-68.

8.

Bismuth, A., & Tojo, Y. (2008). Creating Value from Intellectual Assets. Journal of Intellectual Capital, 9(2), 228-245. https://doi.org/10.1108/14691930810870319

9.

Bontis, N. (1998). Intellectual Capital: An Exploratory Study that Develops Measures and Models. Management Decisions, 36(2), 63-76.

10.

Bontis, N. (1999). Managing organizational knowledge by diagnosing intellectual capital: framing and advancing the state of the field. International Journal of Technology Management, 18(5-8), 433-462.

11.

Bontis, N., Chua, C., Keow, W., & Richardson, S. (2000). Intellectual Capital and Business Performance in Malaysian Industries. Journal of Intellectual Capital, 1(1), 85-100.

12.

Bontis, N., & Serenko, A. (2009). A Casual Model of Human Capital Antecedents and Consequents in the Financial Services Industry. Journal of Intellectual Capital, 1(11), 53-69.

13.

Calisir, F., Gumussoy, C. A., Bayraktaroglu, A. E., &Deniz, E. (2010). Intellectual capital in the quoted Turkish ITC sector. Journal of Intellectual Capital, 11(4), 537-553.

14.

Chan, K. H. (2009). Impact of intellectual capital on organisational performance: an empirical study of companies in the Hang Seng Index (Part 1). The Learning Organization, 16(1), 22-39.

15.

Chen, J., Zhu, Z., & Xie, H. Y. (2004). Measuring Intellectual Capital: A New Model and Empirical Study. Journal of Intellectual Capital, 5(1), 195-212.

16.

Chen, M. C., Cheng, S. J., & Hwang, Y. (2005). An empirical investigation of the relationship between intellectual capital and firms’ market value and financial performance. Journal of Intellectual Capital, 6(2), 159-176.

17.

Chen, M. C., & Cheng, S. J. (2005). An Empirical Investigation of the Relationship between Intellectual Capital and Firms’ Market Value and Financial Performance. Journal of Intellectual Capital, 6(2), 159-176.

18.

Chen, Y. S., Lin, M. J. J., & Chang, C. H. (2006). The influence of intellectual capital on new product development performance-the manufacturing companies of Taiwan as an example. Total Quality Management, 17(10), 1323-1339.

19.

Chu, S. K. W., Chan, K. H., & Wu, W. W. Y. (2011). Charting intellectual capital performance of the gateway to China. Journal of Intellectual Capital, 12(2), 249-276.

20.

Clarke, M., Seng, D., & Whiting, R. H. (2011). Intellectual Capital and Firm Performance in Australia. Journal of Intellectual Capital, 12(4), 505-530.

21.

Dadashinasab, M., Sofian, S., Asgari, M., & Abbasi, M. (2012). The Effect of Intellectual Capital on Performance: A Study among Iranian Automotive Industry. J. Basic. Appl. Sci. Res., 2(11), 11353-11360.

22.

Diez, J. M., Ochoa, M. L., Prieto, M. B., & Santidrian, A. (2010). Intellectual capital and value creation in Spanish firms. Journal of Intellectual Capital, 11(3), 348-367.

23.

Ding, Y., & Li, G. (2010). Study on the management of intellectual capital. International Journal of Business and Management, 5(2), 213-216.

24.

Drucker, P. F. (1993). Post Capitalist Society. Oxford, UK:Butterworth Heinemann Publishings.

25.

Dženopoljac, V., Janoševic, S., & Bontis, N. (2016). Intellectual Capital and Financial Performance in the SerbianICT industry. Journal of Intellectual Capital, 17(2), 373-396. https://doi.org/10.1108/JIC-07-2015-0068

26.

Edvinsson, L., & Malone, M. (1997). Intellectual Capital:Realizing Your Company’s True Value by Finding its Hidden Brainpower. New York, NY: Harper Collins

27.

Edvinsson, L. (1997). Developing intellectual capital at Skandia. Long Range Planning, 30(3), 366-373.

28.

Ekwe, M.C. (2012). Human resource accounting: The relationship between intellectual capital and financial performance in the Nigerian Banking Sector (Ph.D Thesis). University of Nigeria, Nsukka.

29.

Fatoki, O. O. (2011). The Impact of human, social and financial capital on the performance of small and medium-sized enterprises (SMEs) in South Africa. Journal of Social Science, 29(3), 193-204.

30.

Firer, S., & Williams, S. M. (2003). Intellectual capital and traditional measures of corporate performance. Journal of Intellectual Capital, 4(3), 348-360.

31.

Fonseka, M.M., Ramos, C.G., & Tian, G. (2012). The Most Appropriate Sustainable Growth Rate Model for Managers and Researchers. The Journal of Applied Business Research, 28(3), 481-500.

32.

Gan, K., & Saleh, Z. (2008). Intellectual capital and corporate performance of technology-intensive companies: Malaysia evidence. Asian Journal of Business and Accounting, 1(1), 113-130.

33.

García de Leaniz, P. M., & Rodríguez del Bosque, I. (2013). Intellectual capital and relational capital: The role of sustainability in developing corporate reputation. Intangible Capital, 9(1), 1-19. http://dx.doi.org/10.3926/ic.378

34.

Ghosh, D., & Wu, A. (2007). Intellectual Capital and Capital Markets: Additional Evidence. Journal of Intellectual Capital, 8(2), 216-235.

35.

Ghosh, S. K., & Mondal, A. (2009). Indian Software and Pharmaceutical Sector IC and Financial Performance. Journal of Intellectual Capital, 10(3), 369-388.

36.

Higgins, R. C. (1977). How Much Growth Can a Firm Afford? Financial Management, 6(3), 7-16.

37.

Jafari, E. (2013). Intellectual Capital and its Effects on Firms Market value and Financial Performance in Iran:An Investigating Pulic Model. Research Journal of Recent Sciences, 2(3), 1-6.

38.

Kamath, G. B. (2008). Intellectual Capital and Corporate Performance in Indian Pharmaceutical Industry. Journal of Intellectual Capital, 9(4), 684-704. https://doi.org/10.1108/14691930810913221.

39.

Kamath, G. B. (2017). An investigation into intellectual capital efficiency and export performance of firms in India. International Journal of Learning and Intellectual Capital, 14(1). https://doi.org/10.1504/IJLIC.2017.080641

40.

Khalique, M., Shaari, J. A. N., Isa, A. H. M., & Ageel, A. (2011). Relationship of intellectual capital with the organizational performance of pharmaceutical companies in Pakistan. Australian Journal of Basic and Applied Sciences, 5(12), 1964-1969.

41.

Komnenic, B., & Pokrajčić, D. (2012). Intellectual Capital and Corporate Performance of MNCs in Serbia. Journal of Intellectual Capital, 13(1), 106-119. https://doi.org/10.1108/14691931211196231

42.

Kozak, M. (2011). Strategic Approach to Intellectual Capital Development in Regions. Int. J. Learning and Intellectual Capital, 8(1), 76–93.

43.

Kristandl, G., & Bontis, N. (2007). Constructing a definition for intangibles using resourced based view of the firm. Management Decision, 45(9), 1510-1524.

44.

Kwan, L. Y. Y., & Chiu, C. Y. (2015). Country variations in different innovation outputs: The interactive effect of institutional support and human capital. Journal of Organizational Behaviour, 36(7), 1050-1070.

45.

Li, D. Q., & Wu, X. B. (2004). Empirical Study on the Linkage of Intellectual Capital and firm Performance. Paper presented at the Engineering Management Conference, Engineering Management Conference. https://doi.org/10.1109/IEMC.2004.1407188

46.

Li, Z., Chen, Z., Lui, T. T. S., & Chu, S. K. W. (2016). The Impact of Intellectual Capital on Companies’Performances: A Study Based on MAKE Award Winners and Non-MAKE Award Winner Companies. Paper presented at International Conference on Knowledge Mangaement, Vienna, Austria.

47.

Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the Entrepreneurial Orientation Construct and Linking it to Performance. The Academy of Management Review, 21(1), 135-172.

48.

Lynn, B. E. (1998). Performance Evaluation in the New Economy: Bringing the Measurement and Evaluation of Intellectual Capital into the Management Planning and Control System. International Journal of Technology Management, 16(1).

49.

Maditinos, D., Chatzoudes, D., Tsairidis, C., & Theriou, G. (2011).The Impact of Intellectual Capital on Firms Market Value and Financial Performance. Journal of Intellectual Capital, 12(1), 132–151. https://doi.org/10.1108/14691931111097944

50.

Makki, M. A. M., & Lodhi, S. A. (2008). Impact of Intellectual Capital Efficiency on Profitability (A Case Study of LSE25 Companies). The Lahore Journal of Economics, 13(2), 81-98.

51.

Marti, J. M. V. (2001). ICBS – Intellectual Capital Benchmarking System. Journal of Intellectual Capital, 2(2), 148-165.

52.

Mehralian, G., Rasekh, H. R., Akhavan, P., & Sadeh, M. R. (2012). The impact of intellectual capital efficiency on market value: An Empirical Study from Iranian Pharmaceutical Companies. Iranian Journal of Pharmaceutical Research, 11(1), 195-207.

53.

Mondal, A. (2016). Application of Modified Model for Measuring Intellectual Capital Performance. International Journal of Research in Finance and Marketing, 6(11), 19-30.

54.

Nadeem, M. (2016). Intellectual Capital and Firm Performance: Evidence from Developed, Emerging and Frontier Markets of the World (Ph.D Thesis). Lincoln University, Christchurch, New Zealand.

55.

Najibullah, S. (2005). An Empirical Investigation of the Relationship between Intellectual Capital and Firms’Market Value and Financial Performance in Context of Commercial Banks of Bangladesh (Published Ph.D Thesis). Independent University, Bangladesh.

56.

Nassar, S. (2018). The Impact of Intellectual Capital on Corporate Performance of IT Companies: Evidence from Bursa Istanbul. Journal of Accounting and Applied Business Research, 1(3), 1-9.

57.

Nazari, J. A., & Herremans, I. M. (2007). Extended VAIC model: Measuring Intellectual Capital Components. Journal of Intellectual Capital, 8(4), 595-609.

58.

Hashim, M. J., Osman, I., & Alhabshi, S. M. (2015). Effect of Intellectual Capital on Organizational Performance. Procedia – Social and Behavioral Science, 211, 207-214.

59.

Higgins, R. C. (2017). Analysis for Financial Management. India: McGraw-Hill Education (India) Private Limited.

60.

Orugun, J. J., & Aduku, D. J. (2017). Intellectual Capital and Organizational Performance in a Competitive Business Environment: A Review. Asian Research Journal of Arts & Social Sciences, 4(1), 1-9. https://doi.org/10.9734/ARJASS,2017/33080

61.

Pulic, A. (2000). VAIC - An Accounting Tool for IC Management. International Journal of Technology Management, 20(5), 702-724.

62.

Pulic, A. (2004). Intellectual capital – Does it create or destroy value? Measuring Business Excellence, 8(1), 62–68. https://doi.org/10.1108/13683040410524757

63.

Ramezan, M. (2011). Intellectual Capital and Organizational Organic Structure in Knowledge Society:How are these concept related? International Journal of Information Management, 31(1), 88-95.https://doi.org/10.1016/j.ijinfomgt.2010.10.004

64.

Ramezani, C., Soenen, L. A., & Jung, A. (2001). Growth, Corporate Profitability, and Value Creation. Financial Analysts Journal, 58(6). https://doi.org/10.2139/ssrn.304880

65.

Rehman, W. U., Rehman, H. U., Usman, M., & Asghar, N. (2012). A Link of intellectual capital performance with corporate performance: Comparative study from banking sector in Pakistan. International Journal of Business and Social Science, 3(12).

66.

Roos, G., Roos, J., Dragonetti, N. C., & Edvinsson, L. (1997). Intellectual Capital: Navigating in the New Business Landscape. London, UK: Macmillan Publications.

67.

Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2012). Fundamentals of Corporate Finance. India: McGraw-Hill Education (India) Private Limited.

68.

Rudez, H. N., & Mihalic, T. (2007). Intellectual capital in the hotel industry: A case study from Slovenia. Hospitality Management, 26, 188-199.

69.

Shang, S., & Liao, K-H. (2006). A Learning Path of Process Capital Development – A Case Study of an IC Distributor. PACIS 2006 Proceedings. Paper 3.

70.

Sharabati, A. A. A., Jawad, S. N., & Bontis, N. (2010). Intellectual capital and business performance in the pharmaceutical sector of Jordan. Management Decision, 48(1), 105-131.

71.

Shiu, H. J. (2006). The application of the value added intellectual coefficient to measure corporate performance: Evidence from technological firms. International Journal of Management, 23(2), 356-365.

72.

Smriti, N., & Das, N. (2017). Impact of Intellectual Capital on Business Performance: Evidence from Indian Pharmaceutical Sector. Polish Journal of Management Studies, 15(1). 232-243.

73.

Stewart, T. A. (1997). Intellectual Capital: The New Wealth of Organizations. New York, NY: Doubleday.

74.

Sullivan, P. H. (1998). Profiting from Intellectual Capital:Extracting Value from Innovation. New York, NY: J. Wiley.

75.

Sumedrea, S. (2013). Intellectual Capital and Firm Performance: A Dynamic Relationship in Crisis Time. Procedia Economics and Finance, 6, 137-144.

76.

Swart, J. (2005). Identifying the Sub-Components of Intellectual Capital: A Literature Review and Development of Measures. Working Paper, University of Bath, U.K.

77.

Tan, H. P., Plowman, D., Hancock, P. (2007). Intellectual Capital and Financial Returns of Companies. Journal of Intellectual Capital, 8(1), 76-95.

78.

Ting, I. W. K., & Lean, H. H. (2009). Intellectual capital performance of financial institutions in Malaysia. Journal of Intellectual Capital, 10(4), 588-599.

79.

Tohidi, H., & Jabbari, M. M. (2012). The important of Innovation and its Crucial Role in Growth, Survival and Success of Organizations. Procedia Technology, 1, 535-538.

80.

Tseng, C., & Goo, Y.J. (2005). Intellectual Capital and Corporate Value in an Emerging Economy: Empirical Studies of Taiwanese Manufacturers. R&D Management, 35(2), 187-201.

81.

Van Horne, J.C., & Wachowicz, J.M. (2015). Fundamentals of Financial Management. India: PHI Learning Private Limited.

82.

Wang, M. S. (2011). Intellectual Capital and Firm Performance. Paper presented at Annual Conference on Innovations in Business & Management, London, UK., 1-26.

83.

Xu, J., & Wang, B. (2018). Intellectual Capital, Financial Performance and Companies’ Sustainable Growth:Evidence from the Korean Manufacturing Industry. Sustainability, 10, 4651. doi:10.3390/su10124651

84.

Yildiz, S., Meydan, C., & Guner, M. (2014). Measurement of Intellectual Capital Components through Activity Reports of Companies. Procedia – Social and Behavioral Science, 109, 614-621.

85.

Yu, K. Y., Ng, H. T., Wong, W. K., Chu, K. W., & Chan, K. H. (2010). An Empirical Study of the Impact of Intellectual Capital Performance on Business Performance. Journal of Information & Knowledge Management, 10(1), 11-21

86.

Zeghal, D., & Maaloul, A. (2010). Analysing value added as an indicator of intellectual capital and its consequences on company performance. Journal of Intellectual Capital, 11(1), 39-60. https://doi.org/10.1108/14691931011013325

87.

Zhang, J. J., Nai-Ping, Z., & Yu-Sheng, K. (2006). Study on Intellectual Capital and Enterprise Performance. Journal of Modern Accounting and Auditing, 2(10), 35-39.

Asian Journal of Business Environment