Title: Effects of intellectual capital investments on productivity and profitability

Authors: Jaani Vaisanen, Paula Kujansivu, Antti Lonnqvist

Addresses: Institute of Business Information Management, Tampere University of Technology, P.O. Box 541, 33101 Tampere, Finland. ' Institute of Industrial Management, Tampere University of Technology, P.O. Box 541, 33101 Tampere, Finland. ' Institute of Business Information Management, Tampere University of Technology, P.O. Box 541, 33101 Tampere, Finland

Abstract: The objective is to determine how investments in Intellectual Capital (IC) affect a company|s productivity and profitability. The examination is based on a large set of financial statement information covering a three-year period. Time-lagged correlation and regression analyses are used to study the relationships within the whole data set, in different industries as well as in SMEs and large companies. The findings suggest that the short-term impact of IC investments on productivity and profitability is negative. However, the findings also provide support for the earlier research evidence suggesting that investments in IC do yield benefits, but they may come with a delay.

Keywords: intangible assets; intellectual capital; IC investment; productivity; profitability; relationships; time lag; financial statements; financial information.

DOI: 10.1504/IJLIC.2007.016334

International Journal of Learning and Intellectual Capital, 2007 Vol.4 No.4, pp.377 - 391

Published online: 19 Dec 2007 *

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