Title: Intellectual capital and corporate financial performance in India's central public sector enterprises

Authors: Faizi Weqar; S.M. Imamul Haque

Addresses: Department of Commerce, Aligarh Muslim University (AMU), Aligarh, India ' Department of Commerce, Aligarh Muslim University (AMU), Aligarh, India

Abstract: The purpose of this paper is to empirically examine the effect of intellectual capital on the financial performance of the central public sector enterprises (CPSEs) operating in India and also to analyse the contribution made by each component of intellectual capital in the financial performance of the organisation. Secondary data were collected from the constituent companies of the S&P Bombay Stock Exchange (BSE) CPSE index from 2009 to 2018. VAICTM methodology developed by Professor Pulic has been employed for measuring the intellectual capital efficiency of the CPSEs. The results revealed that intellectual capital shows a weak relationship with profitability (ROA) and market valuation (MB), but it acts as a strong predictor of productivity (ATO). Also, the result shows that human capital is the most significant element among all the three components of intellectual capital, in enhancing the financial performance of the CPSEs.

Keywords: value added intellectual coefficient; VAIC; intellectual capital; financial performance; central public sector enterprise; CPSE; India; profitability; productivity; market valuation; human capital; structural capital; physical capital.

DOI: 10.1504/IJLIC.2020.105323

International Journal of Learning and Intellectual Capital, 2020 Vol.17 No.1, pp.77 - 97

Received: 18 Jan 2019
Accepted: 17 May 2019

Published online: 17 Feb 2020 *

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