The impacts of intellectual capital of microfinance institutions on poverty alleviation

This paper re-examines the relationships between intellectual capital, financial performance and market value. The exogenous variables examined include human capital efficiency, structural capital efficiency (SCE) and capital employment efficiency - all used as proxies for intellectual capital (IC). Return on assets (ROA) and market value (MV) are the endogenous variables. The following are the main findings. First, intellectual capital (IC) as represented by human capital and capital efficiency significantly affects financial performance that represented by ROA over the long term, whereas IC as represented by structural capital cannot adapt to changes in the business environments. Second, SCE has failed to moderate the relationship between IC with ROA. Third, IC as represented by human capital, structural capital and capital efficiency significantly affects MV. Finally, SCE is being able to moderate the relationships between IC and MV.

VAIC(Value Added Intellectual Coefficient) is the model devised by Pulic (2000a, b) to measure firm’s intellectual capital. This indicator does not directly measure the intellectual capital of the firm, but it measures the added value created by the intellectual capital, and consists of CEE(Capital Employed Efficiency), HCE(Human Capital Efficiency), and SCE(Structural Capital Efficiency). We examine the impact of intellectual capital on corporate value and financial performance through panel data for 177 manufacturing firms among KOSPI 200 from 2011 to 2018. Panel data show that CEE, HCE, and SCE which are comprising VAIC are 5%, 83%, and 12%, respectively. Findings are as follows: First, VAIC has a positive impact on corporate value and financial performance statistically. Second, CEE and HCE have the positive impact like VAIC, however, SCE is not significant statistically. Third, RD intensity and AD intensity which is proxied by the intangible resource of the firm have different effects on corporate value and financial performance. Both variables have a positive impact on corporate value, but RD intensity has a negative relationship with financial performance, whereas AD intensity has no statistical significance. The academic contribution of our study provides practical evidence of the effect of intellectual capital on corporate value and financial performance using VAIC in the Korean context and the practical implication is that the managers who wish to create value and to achieve sustainable competitive advantage should invest human resources continuously.

Intellectual capital (IC) is considered as a key resource in business. However, it is difficult to measure and compare across firms due to its intangible nature. The Value Added Intellectual Coefficient (VAIC) model proposed by Pulic (1998; 2000) might be used to overcome these issues. The purpose of this study is to apply the VAIC model to investigate the impact of IC on market performance among R&D engaging firms. The sample for this study comprises multinational firms listed on the United States (U.S.) stock exchanges which engaged in R&D activity during the period 2006-2013. The sample employed consists of 1,328 firm-year observations and the data were obtained from the Compustat database. Market performance is measured using the market-to-book ratio and Tobin’s q ratio. The study employs the VAIC model to measure aggregate IC efficiency and its elements: human capital efficiency, structural capital efficiency and tangible capital efficiency. The study also controls for the effects of size, leverage, year and industry on market performance. The data were analyzed using descriptive, correlation and multiple linear regression analyses. From the regression analysis, the results indicate that aggregate IC efficiency has a positive and significant association with market performance among R&D firms. However, among the components of aggregate IC efficiency, human capital efficiency has no significant association with R&D firms’ market performance while structural capital efficiency and tangible capital efficiency have a positive and significant association with market performance. The findings suggest that the synergy derived from the combination of IC and tangible resources has a significant influence on the market valuation of R&D firms. The finding also suggests the importance of structural and tangible capital over human capital in R&D engaging firms. The findings provide not only empirical evidence on the relationship between IC and market performance among R&D engaging firms, but also provides important further evidence on the VAIC model as an IC measurement method. Empirical studies to date have found mixed evidence on the adequacy of the VAIC model. In respect of structural and tangible capital the results of this study provide support for the VAIC model; but not in respect of human capital.

The purpose of this study is to empirically investigate the relationship between intellectual capital (IC) measured by the value-added intellectual coefficient (VAIC) and firms’ performance (FP) in the Saudi context. Data are drawn from a sample of 25 Saudi firms listed on the Saudi Stock Exchange (Tadawul) for the period 2015-2018. Using the VAIC model, the multiple linear regression models were constructed to examine the relationship between intellectual capital (IC) and firms’ performance (measured in terms of financial and market performance). The findings indicate that there is a positive association between overall intellectual capital efficiency as well as each of its three components (human capital efficiency, structural capital efficiency, capital employed efficiency) and the firms’ financial performance. Additionally, there is a positive association between human capital efficiency(HCE), structural capital efficiency (SCE), and the firms’ market performance. Overall, the findings suggest that human capital efficiency (HCE) has a significant and positive impact on firms’ financial and market performance in Saudi Arabia. The VAIC method may be a useful tool for managers and investors in their decision process. This is the first study about the impact of intellectual capital on firms’ performance in four industry groups in Saudi Arabia using the VAIC model.

This study investigated whether income diversification moderates the relationship between Intellectual Capital and bank performance in Vietnamese commercial banks period 2007–2020 using the system generalised method of moments (GMM).” The results indicate that the value added intellectual coefficient (VAIC) and its components (“human capital efficiency (HCE), “ capital employed efficiency (CEE), and “structural capital efficiency (SCE)) have positive effects on bank performance. Second, the study examines that income diversification (ID) has a negative and considerable impact on bank performance. Finally, the findings show that income diversification, as a moderating element, lowered the overall impact of IC (Value Added Intellectual Capital (VAIC)) efficiency on bank performance. The role of income diversification in modulating the link between the distinct components of VAIC (HCE, SCE and CEE). While revenue diversification improved the influence of SCE on bank performance, it weakened the impact of HCE. Furthermore, income diversification had little effect on bank performance in terms of mitigating the effects of CEE. Therefore, this finding highlights the contribution by suggesting that non-traditional banking activities influence the relationship between Intellectual Capital and bank performance in Vietnam

This study examines the moderating effect of intellectual capital (IC) on the relationship between corporate social responsibility (CSR) reporting and financial performance of 36 listed firms in Ghana from 2013 to 2022. We employed the system generalized method of moment and the dynamic panel threshold regression. We used data from BankScope, the Refinitiv database, and unconsolidated financial statements. We discovered a significant negative effect of CSR reporting on financial performance. Conversely, the IC components including value-added intellectual coefficient (VAIC), human capital efficiency (HCE), and structural capital efficiency (SCE) have a positive effect on financial performance. However, capital employed efficiency (CEE) negatively impacts financial performance of listed firms in Ghana. Our study further revealed that VAIC, HCE, and SCE exhibit positive and statistically significant moderating effects on the relationship between CSR reporting and financial performance. Our analysis also reported a negative and significant effect of CEE on the relationship between CSR reporting and financial performance. We also found that CSR reporting positively affects financial performance of listed firms in Ghana when IC (VAIC, HCE, and SCE) exceeds a certain threshold. Firms must carefully consider the interplay between CSR reporting, IC, and environmental engagement to optimize their financial performance. This research contributes to the theoretical understanding by demonstrating how IC components, particularly VAIC, HCE, and SCE, positively moderate the relationship between CSR reporting and financial performance, offering fresh perspectives on the role of IC in enhancing the financial outcomes of CSR activities among listed firms in Ghana.

The current study is aimed at analyzing the impact of intellectual capital on the performance of Sharia-compliant banks in Saudi Arabia for the period 2013–2018. The intellectual capital efficiency has been measured by applying a widely-used proxy to intellectual capital, i.e., Value Added Intellectual Coefficient (VAIC). A multiple linear regression method, based on panel data using the pooled Ordinary Least Squares (OLS), was exerted. Regression equations were obtained to determine the impact of VAIC and its components (Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), and Capital Employed Efficiency (CEE)) on the financial performance of banks, designated as Return on Assets (ROA) and Return on Equity (ROE). The study has found out that VAIC has a statistically significant impact on the financial performance of Sharia-compliant banks in Saudi Arabia. But VAIC components fail to have a significant impact on ROE. However, these components significantly affect ROA. The study concludes that Sharia-compliant banks in the Kingdom of Saudi Arabia should pay particular attention to Intellectual Capital (IC) in general and Human Capital (HC), Structural Capital (SC), and Employed Capital (EC) in particular to increase Return on Assets and financial performance as a whole.

Intellectual capital is becoming increasingly important in financial decisions made by managers in the information-based environment. However, only a small portion of a company’s total assets is represented by intangible assets (such as concessions, licenses, patents, and trademarks). The current research investigates the relationship between an organization’s Intellectual capital and its health. A new model — Modified Extended Value-added Intellectual Capital Coefficient — was also proposed. The findings were compared with the two existing models, namely, Value Added Intellectual Coefficient and Modified Value Added Intellectual Coefficient. Panel data regression is used to assess the performance of 25 Indian pharmaceutical and drug companies throughout the period 2010–2019. Human capital efficiency, structural capital efficiency, and relational capital efficiency have been proven to have a substantial positive correlation with return on assets (ROA). In addition, a negative yet significant link exists between organizational capital efficiency and a company’s profitability. Under the Value Added Intellectual Coefficient, human capital and structural capital efficiency do not affect the market value to book value. The market value-to-book value, on the other hand, is positively impacted by capital employed efficiency.

Intellectual Capital is essential in every economical activity. The aim of this study how intellectual capital impact on financial performance in Sri Lankan financial institution. To achieve objective of this research banking institution has been selected from Colombo Stock Exchange financial directory for the period from 2016 to 2020. Random sampling technique were used to analysis the data. MVIAC model used for the measurement of independent variable in this study. This model is a composite sum of two indicators these are Capital Employed Efficiency (CEE) - indicator of VA efficiency of capital employed and Intellectual Capital Efficiency (ICE) – indicator of value-added efficiency ofcompany’s Intellectual Capital base. Intellectual Capital Efficiency is composed of (a) Human Capital Efficiency (HCE) – indicator of value-added efficiency of human capital; and (b) Structural Capital Efficiency (SCE) – indicator of value-added efficiency of structural capital (c) Rational Capital Efficiency (RCE). Finding represent that intellectual capital has significant impact on financial performance of Sri Lankan financial institution, specially banking industry. SCE and CEE has negative impact while RCE impact positively on financial performance.

The purpose of this research is to investigate the relation between the value creation efficiency of firms' intellectual capital and firm's market valuation and financial performance. Using 13 manufacturing companies data drawn from Jakarta Stock Exchange (JSX) reporting period 1999-2003 and Pulic's Value Added Intellectual Coefficient (VAIC) as the efficiency measure of three intellectual capital component; capital employed efficiency (VACA), human capital efficiency (VAHU), and structural capital efficiency (STVA) and multiple regression model to examine the relationship between corporate value creation efficiency and firms' market-to-book value ratio, and explore the relationship between intellectual capital and firms' financial performance. The simple regression used to examine the relationship between VAIC and market value and relationship between VAIC and financial performance. The result is not support the first model; market value hypothesis that there is significantly negative between intellectual capital and market-to-book value ratio (M/B). The second model of the regression show there are positively associated between the three of intellectual capital component and return on equity (ROE) as financial performance.

PurposeThe purpose of this paper is to establish the relationship between intellectual capital (IC) and employees' productivity (EP) in the Gulf Cooperation Council (GCC) region.Design/methodology/approachThe value-added intellectual coefficient (VAIC) is used to measure IC performance in 198 firms listed in Saudi Arabia and Bahrain from 2012 to 2014. The pooled-corrected estimation technique is used to estimate a panel regression model with EP as the dependent variable. Firm size and sectors are controlled for in the regression analysis. The independent variable (IC) has been measured using human capital efficiency (HCE), structural capital efficiency and capital employed efficiency (CEE) in order to measure the value of IC.FindingsBased on the VAIC, the authors found that the values of IC investments are mostly generated from investments in human capital. The results of the panel-corrected ordinary least square indicate that VAIC and its individual components are positive and significantly related to variations in employees' productivity. HCE contributed the highest and CEE contributed lowest VAIC.Originality/valueThe originality of this paper is to show the importance of investment in the human capital as a key contributor of firm's performance. Hence, this study encourages firm's leaders and management in the GCC to invest and focus their management/leadership styles on human capital to achieve their goals. To the best of the knowledge of the coauthors, this is the first study which empirically examines the relationship between IC and EP in the GCC region.

This paper examines whether Intellectual Capital (IC) efficiency is associated with Earnings Quality (EQ) for Jordanian-listed firms. Using the value-added intellectual coefficient and total accruals models to measure both IC and EQ, a positive and significant association was found between IC efficiency and EQ. Also found were a significant positive relationship between relational capital efficiency and EQ, a significant negative relationship between structural capital efficiency and EQ, and no relationship between human capital efficiency and EQ except in the real estate sector. Those results have implications for the competitive advantage of firms over rivals, corporate management decision-making, and the performance of the Jordanian capital market.

The paper aims at investigating the effect of intellectual capital (IC) on the performance of financial institutions in Bangladesh. Quantitative data are collected from 49 financial institutions listed in the Dhaka Stock Exchange (DSE) for the year ending 2012 and 2013. IC is measured using Value Added Intellectual Coefficient (VAIC) developed by Pulic (1998). The impact of both the current and past years' VAIC on firm performance is measured, along with the effects of its three components - human capital efficiency (HCE), capital employed efficiency (CEE), and structural capital efficiency (SCE). The stepwise regression results indicate a positive and significant relationship between current year VAIC and two measures of firm performance (ROA, ROE) while past years' VAIC is found insignificant for all three measures of firm performance. HCE for the current year is found to be the most significant contributor toward firm performance among all the three components of VAIC, having a substantial positive relationship with all three measures of firm performance. SCE of the current year significantly affects ROA and ROE whereas CEE is found to be significant only for ROA. While measuring past years' effect on performance, only HCE has been found to have a negative influence on current year's revenue growth (RG).

PurposeThe question of whether intellectual capital (IC) is beneficial to firm performance is debatable because of the diverse effects of IC and its components on firm performance. Building on the concept of pay–performance relation, this study aims to provide new insights into how changes in IC affect changes in firm performance.Design/methodology/approachData envelopment analysis is employed to measure firm performance, and value-added intellectual coefficient (VAIC™) is selected to evaluate the IC and its components, namely human capital efficiency (HCE), structural capital efficiency (SCE), and capital employed efficiency (CEE). Ordinary least squares regression is applied to study the relationship between changes in IC and changes in firm performance using 6,408 firm-year observations of electronics companies listed in Taiwan from 2006 to 2017.FindingsEmpirical results suggest that IC efficiency and CEE significantly and negatively affect firm performance, thereby suggesting a contradictory common sense with the resource-based view on the beneficial effects of IC. However, changes in IC efficiency and HCE are significantly and positively related to changes in firm performance, including changes in firm efficiency and sales growth.Practical implicationsThis study suggests that managers should continuously pay attention to adjusting their IC, especially human capital (HC) for better decisions that help grow firm performance. Moreover, investors can grasp how sensitive firm performance is to IC.Originality/valueThis study argues the relationship between IC and firm performance in the same vein as a pay-for-performance link, suggesting that future studies should account for increases or decreases in IC.

Intellectual capital efficiency measurement is a major problem facing managers of companies because of its intangible nature; thus, there is difference between book-value and market value of assets of the companies. Hence, this work investigated the intellectual capital (IC) efficiency on companies’ performance of 117 quoted firms in Nigeria between 2018 and 2019 periods using Pulic Value Added Intellectual Coefficient (VAIC) Model. Data were sourced through secondary means from audited annual reports of the sample. The data gathered were analysed with both Pearson correlation and regression analysis to test the study hypotheses. The results of the study revealed that there is positive significant relationship between Human Capital efficiency, Return on Equity and Return on Asset. The study further revealed positive and significant relationship between Structural Capital Efficiency, Return on Equity and Return on Asset. But out of three control variables only sector was significant with structural capital efficiency. The study concluded that intellectual capital efficiencies influence companies’ performance of the sampled companies. The study recommended that management of the sampled companies should give priority to policies that will improve employees’ capability and organizational structure.