Abstract
This paper aimed to examine the effect of intellectual capital (IC) and its dimensions on the financial performance of Indian firms. The data of 88 Indian firms engaged in tea packaging, selling, and distribution for six years from 2013 to 2018 were extracted. Value added intellectual coefficient (VAIC™) methodology forms the basis for quantifying the firm's IC performance. By applying the fixed-effect regression analysis, the result shows that IC significantly enhances the profitability and productivity of the Indian tea industry. Likewise, among the three components of VAIC, capital employed efficiency (CEE) plays the most vital role in improving the financial performance of the Indian tea industry, followed by structural capital efficiency (SCE). Human capital efficiency (HCE), the third component of IC efficiency, shows a significant positive influence on profitability and a substantial negative impact on the firm's productivity.
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