Human Capital Efficiency and Firm Performance: An Empirical Study on Malaysian Technology Industry

Azlina Rahim,Ruhaya Atan,Amrizah Kamaluddin,M.Y Jaaffar,A Muhammad,A Abdullah Sani

doi:10.1051/shsconf/20173600026

Abstract

This study examined the relationship between human capital efficiency and firm’s performance in Malaysian technology industry. Using accounting data, this study reviewed annual reports of all technology companies listed under Main Market and Ace Market of Bursa Malaysia in year 2009. The study applied Value Added Intellectual Coefficient (VAICTM ) methodology developed by Ante Pulic to measure human capital efficiency. The results showed that there was not much difference in terms of human capital efficiency between the Main Market and Ace Market. Results from correlation analysis indicate that human capital efficiency has significant and positive relation with firm’s performance. Findings from this study may be useful to companies’ managers to make better decision pertaining to the proper deployment of their strategic asset, namely human capital.

Highlights

Human capital is the components that emerged from the concept of intellectual capital (Bontis et al, 2000; Tayles et al, 2007)
The aim of this study is to provide an empirical view of the present state of human capital (HC) in Malaysian technology companies for year 2009
The results revealed that there were significant differences between rankings of bank according to efficiency and traditional accounting measures.Hazlina and Zubaidah (2008) examined the intellectual capital and performance for companies listed in the Bursa Malaysia Main Board for the year 2005-2006.They found significant positive relationship to firms’ profitability

Summary

Introduction

Human capital is the components that emerged from the concept of intellectual capital (Bontis et al, 2000; Tayles et al, 2007). Human capital is the most important asset that exists within a firm It represents the human factor in an organisation where by combination of intelligence, skills, knowledge, aptitudes and expertise that gives the organisation its distinctive character which those traits contributing to production and profitability, improve organizational performance (Bontis et al, 2000 Tayles et al, 2007; Gazor et al, 2013). The Value Added Intellectual Coefficient (VAICTM) has been introduced by Ante Pulic which can be used to measure the efficiency of intellectual capital within a company. The introduction of these monetary intellectual capital measurement methods provides new opportunities for companies and their stakeholders. This is because it provides a concrete basis for comparing the intellectual capital of different companies (Kujansivu and Lonnqvist, 2005)

Objectives

Methods

Results

Conclusion