Intellectual capital and its consequences on company performance: a study of Indian sectors

The present study analysed the association of intellectual capital components (human, structural and physical capital) with economic, financial and stock market performance in manufacturing, service and technology sector of India. Value added intellectual co-efficient (VAIC™) method has been applied to measure efficiency of intellectual capital. The results of the study evince that human capital efficiency (HCE) is positively associated with financial performance and negatively associated with stock market performance in all sectors respectively. It is also found that structural capital efficiency (SCE) is not playing any role in improving the economic, financial and stock market performance of the companies. Finally, the study shows that capital employed efficiency (CEE) has a significant impact on economic and financial performance of the companies of all the sectors. The study provides useful suggestions to the researchers, academicians, investors and government regarding importance of intellectual capital measurement and its relation with financial performance.