The interrelationship between intellectual capital and firm performance: evidence from China's manufacturing sector
Journal of Intellectual Capital
ISSN: 1469-1930
Article publication date: 10 September 2020
Issue publication date: 8 February 2022
Abstract
Purpose
The purpose of this paper is to examine the impact of intellectual capital (IC) and its components (human, structural and relational capitals) on the performance of manufacturing listed companies in China. This paper also investigates the impacts of company ownership, industry attributes and region on the IC-performance relationship.
Design/methodology/approach
The study uses the data of 953 manufacturing companies listed on the Shanghai and Shenzhen Stock Exchanges over the period 2012–2016. The modified value-added intellectual coefficient (MVAIC) model is applied to measure IC efficiency. Finally, multiple regression analysis is employed to test the research hypotheses.
Findings
This study reveals that IC can enhance firm performance in China's manufacturing sector. Overall, earnings are affected by physical capital, human capital (HC) and structural capital (SC), and profitability and productivity are influenced by physical capital, HC, SC and relational capital. Physical capital is the most influential contributor to firm performance. In addition, state-owned enterprises have a greater impact of IC on firm performance than private-owned enterprises; high-tech manufacturing companies have higher IC performance than non-high-tech manufacturing companies; manufacturing companies in China's eastern region have higher IC performance than the counterparts in central and western regions.
Practical implications
The findings may help managers, stakeholders and policymakers in developing countries to effectively and efficiently manage their IC resources.
Originality/value
This is the first study to evaluate IC and its relationship with firm performance among Chinese manufacturing listed companies using the MVAIC model.
Keywords
Acknowledgements
The research was financially supported by the Soft Science Research Plan of Shandong Province (Grant Number 2019RKB01222), the Key Research and Development Program of Shandong Province (Grant Number 2019FW037) and the Social Science Planning Research Program of Shandong Province (Grant Number 20CGLJ05).
Citation
Xu, J. and Li, J. (2022), "The interrelationship between intellectual capital and firm performance: evidence from China's manufacturing sector", Journal of Intellectual Capital, Vol. 23 No. 2, pp. 313-341. https://doi.org/10.1108/JIC-08-2019-0189
Publisher
:Emerald Publishing Limited
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