Title: Does intellectual capital impact the financial performance of Indian-listed SMEs? Evidence from GMM estimation

Authors: Ramesh Prasad; Amitava Mondal

Addresses: Department of Commerce & Management, St. Xavier's University, Kolkata, WB, India ' Department of Commerce, Sidho-Kanho-Birsha University, Purulia WB, India

Abstract: In the present research, we explore the differential effects of 'intellectual capital' (IC) on the financial performance of 100 Indian SMEs listed on the BSE SME, focusing on the pre-COVID (2013-2014 to 2019-2020) and during the COVID (2020-2021 to 2022-2023) periods, using pooled OLS, static panel regression, followed by the robust GMM estimation. The findings demonstrate varying impacts of IC under different economic phases. The results from Pre-pandemic phase reveal that profitability of Indian SMEs is predominantly driven by the efficiencies of capital employed and structural capital, while each IC component constitute the core drivers of productivity. The analysis of the COVID period indicates that human, structural, and financial capital were identified as primary factors in fostering profitability, whereas, human capital, financial capital and relational capital are key drivers in optimising productivity. This novel comparative analysis highlights the evolving role of IC under different economic conditions, offering practical insights for policymakers, investors and SMEs. The findings pinpoint the need for adaptive IC strategies to enhance resilience and performance during economic disruptions. These results provide a framework to harness IC in navigating economic downturns, offering lesson for SMEs globally in leveraging IC for sustainable growth.

Keywords: intellectual capital; small and medium sized enterprises; SMEs; human capital; relational capital; MVAIC; return on investment; ROI; total factor productivity; total factor productivity; TFP; GMM; COVID-19.

DOI: 10.1504/IJLIC.2025.146010

International Journal of Learning and Intellectual Capital, 2025 Vol.22 No.1, pp.5 - 28

Received: 22 Apr 2024
Accepted: 06 Dec 2024
Published online: 01 May 2025 *

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