Title: Intellectual capital and firm performance in India: a comparative study between original and modified value added intellectual coefficient model

Authors: Santi Gopal Maji; Mitra Goswami

Addresses: Department of Commerce, North Eastern Hill University, Umshing, Shillong-793022, Meghalaya, India ' Department of Commerce, North Eastern Hill University, Umshing, Shillong-793022, Meghalaya, India

Abstract: With the dawn of a knowledge economy, the role of intellectual capital in value creation and sustainable competitive advantage became evident. With increasing importance of intellectual capital, the emphasis on its management and measurement increased manifolds. The Pulic's value added intellectual coefficient (VAIC) model is one such method that has been widely used for measuring intellectual capital and examining the link between IC and firm performance. However, this model has been criticised because of its inefficiency to capture the structural capital of a firm. The present study is a modest attempt to modify Pulic's VAIC model with the primary intention of dealing with the structural capital measurement deficiency. Employing panel data and quantile regression on Indian firms for a period of 15 years from 2000-2001 to 2013-2014, the study finds that both original VAIC model and the modified model advocate in favour of the positive influence of IC and its components on firm performance. With respect to structural capital, the study reveals that the modified VAIC model to some extend captures the structural capital efficiency of a firm more efficiently than the original model.

Keywords: intellectual capital; human capital; structural capital; physical capital; value added intellectual coefficient; modified VAIC; firm performance; India; firm performance.

DOI: 10.1504/IJLIC.2017.080645

International Journal of Learning and Intellectual Capital, 2017 Vol.14 No.1, pp.76 - 89

Received: 21 Dec 2015
Accepted: 09 Mar 2016
Published online: 01 Dec 2016 *

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