IDEAS home Printed from https://ideas.repec.org/a/ids/ijlica/v12y2015i4p342-371.html
   My bibliography  Save this article

The effect of intellectual capital on firms' financial performance: an empirical investigation in India

Author

Listed:
  • Trilochan Tripathy
  • Luis A. Gil-Alana
  • Debadutta Sahoo

Abstract

This study empirically examines the effect of the intellectual capital efficiency on firms' financial performance in selected Bombay Stock Exchange listed and permitted Indian companies. Using Pulic's (1998) value added intellectual coefficient (VAIC™) as the efficiency measure of capital employed and intellectual capital, the authors fit panel models to examine the effect of intellectual capital efficiency on firms' financial performance. The result suggests that the component based intellectual capital models explain better than the composite VAIC models. However comparing across the models, it is observed that the physical capital (VACA) positively influences the firms' ROA, which suggests that the physical capital has no doubt remained a key driving force for competitive business performance for firms' in India. The innovative capital efficiency captures additional information on structural capital which positively influences firms' financial performance. The results extend the understanding of the role of intellectual capital in creating corporate value and building sustainable advantages and financial performance for companies in emerging economies, where different technological advancements may bring different implications for the valuation of intellectual capital.

Suggested Citation

  • Trilochan Tripathy & Luis A. Gil-Alana & Debadutta Sahoo, 2015. "The effect of intellectual capital on firms' financial performance: an empirical investigation in India," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 12(4), pages 342-371.
  • Handle: RePEc:ids:ijlica:v:12:y:2015:i:4:p:342-371
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=72197
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:bap:journl:170205 is not listed on IDEAS
    2. repec:gam:jsusta:v:10:y:2018:i:12:p:4651-:d:188574 is not listed on IDEAS
    3. Trilochan Tripathy & Debadutta Sahoo & Ankit Kesharwani & Ajay Kumar Mishra, 2016. "Competition, intellectual capital efficiency and firms' performance outcome in India: a structural equation modelling," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 13(1), pages 72-95.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijlica:v:12:y:2015:i:4:p:342-371. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carmel O'Grady) The email address of this maintainer does not seem to be valid anymore. Please ask Carmel O'Grady to update the entry or send us the correct email address. General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=86 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.