Title: Testing the relationship between intellectual capital and a firm's performance: an empirical investigation regarding financial industries of Pakistan
Authors: Muhammad Ahmad; Naveed Ahmed
Addresses: Department of Management Science, Leads Business School, Lahore Leads University, P.O. Box 54810, Lahore, Pakistan ' Department of Managements Sciences, Comsats Institute of Information and Technology Lahore, P.O. Box 54810, Lahore, Pakistan
Abstract: The purpose of this study is to investigate the intellectual capital (IC)'s performance and its impact on the financial performance of 78 listed financial industries of Pakistan from 2008 to 2013. VAIC™ model is applied to measure the efficiency of IC and its components. The empirical results obtained from the study clearly indicate that IC is an important determinant of the financial efficiency of the Pakistani financial firms. However, when IC is divided into parts, the performance of human capital plays a significant role. As a whole, all companies have relatively higher human capital performance than structural and tangible capital efficiencies. This study makes a valuable addition in the literature by selecting all the financial sectors of Pakistan (banks, life and non-life insurance firms, modaraba firms, mutual fund firms and leasing firms) to investigate the intellectual capital-performance relationship as the previous researchers focused only on one or two financial sectors.
Keywords: intellectual capital performance; firm performance; financial performance; Pakistan; financial services; VAIC; physical capital; human capital; financial efficiency.
International Journal of Learning and Intellectual Capital, 2016 Vol.13 No.2/3, pp.250 - 272
Received: 30 Jun 2015
Accepted: 12 Oct 2015
Published online: 31 Mar 2016 *