Title: Intellectual capital and corporate profitability: zooming into value added intellectual coefficient

Authors: Irene Wei Kiong Ting; Qian Long Kweh; Jawad Asif; Hanh Thi My Le

Addresses: Faculty of Industrial Management, Universiti Malaysia Pahang, Pahang, Malaysia ' Faculty of Management, Canadian University Dubai, Dubai, United Arab Emirates ' Faculty of Industrial Management, Universiti Malaysia Pahang, Pahang, Malaysia ' Benchmarking Research Group, Faculty of Accounting, Ton Duc Thang University, Ho Chi Minh City, Vietnam

Abstract: This study examines how value-added intellectual coefficient (VAIC™) and the modified VAIC™ affect corporate profitability. Using a Vietnamese corporate financial dataset of 1,624 firm-year observations for the period of 2009-2018, this study finds that intellectual capital (IC), as estimated by VAIC™ and modified VAIC™, has positive impacts on corporate profitability. However, the positive association between IC and profitability is clearer in the scatterplot involving the modified VAIC™. Although VAIC™ and modified VAIC™ consistently suggest positive impacts of IC on corporate profitability, the components of the two show different outcomes. This study stimulates the need to further examine not only VAIC™ but also other IC measurement models to help practitioners better estimate their IC for the best possible corporate profitability.

Keywords: intellectual capital; value added intellectual coefficient; VAIC™; modified VAIC™; corporate profitability.

DOI: 10.1504/IJLIC.2022.125350

International Journal of Learning and Intellectual Capital, 2022 Vol.19 No.5, pp.461 - 489

Received: 25 Mar 2021
Accepted: 13 Jul 2021
Published online: 07 Sep 2022 *

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