Intellectual Capital and Financial Performance: Comparison With Financial and Pharmaceutical Industries in Vietnam.

Fu-Sheng Tsai,Eugene Burgos Mutuc,Xiao-Bing Zhang,Tran Phuong Duc

doi:10.3389/fpsyg.2021.595615

Abstract

This study investigates the impacts of intellectual capital through Value-Added Intellectual Capital (VAIC) and its components: human capital efficiency (HCE) and structural capital efficiency (SCE) on financial performance in terms of return on assets (ROA) and return on equity (ROE). In addition, this study compares the effects between firms from financial and pharmaceutical industries. A total of 149 Vietnamese firms comprising of 108 financial firms and 41 pharmaceutical firms were examined. Based on the findings, VAIC and HCE show beneficial impacts on both financial performance measures, ROA, and ROE. However, SCE shows adverse and beneficial implications on ROA and ROE, respectively. In terms of industry comparison, VAIC has positive effects on ROA and ROE among the firms from financial industry, whereas it has no effect in the firms from pharmaceutical industry. The effect of HCE on ROA is stronger in the firms from financial industry than firms from pharmaceutical industry while the effect of HCE on ROE is stronger in the firms from pharmaceutical industry than firms from financial industry. The effect of SCE on ROA is stronger in the pharmaceutical firms than financial firms while the effect of SCE on ROE is stronger in the financial firms than pharmaceutical firms. Lastly, the implications of the importance of knowledge-based resources on value creation were elaborated.

Highlights

Business firms all over the world face the biggest and fiercest competition, nowadays
Result of t-tests to examine if the coefficients are statistically significant different along high-CSR ratings group and low-CSR ratings group
Outcome of this research contributes in the field of knowledgebased resources and value creation through the investigation of the implications of intellectual capital (IC) and its components on financial performance and the industry comparison of the phenomenon

Summary

Introduction

Business firms all over the world face the biggest and fiercest competition, nowadays. In order to survive in that dynamic business environment, firms must find various strategies to allocate and develop their resources more efficiently. This action provides a better foundation to enhance market strategies and market performances (Grant, 1991). Compared to the financial-based tangible resources (e.g., manufacturing equipment, Intellectual Capital and Financial Performance real estates, factories, or financial property), the intangible resources of a company (e.g., worker skills, relationship with customers, corporate culture and values, reputation, and organizational structures) are unquestionably more difficult to imitate by its rivals (Sveiby, 1997). The capability to exploit these resources deliberately form the bottom line of intellectual capital (IC) (Bontis, 1998)

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Results

Conclusion