The Effect of Intellectual Capital on Firm Profitability and Efficiency: Evidence from Thai Listed Companies in the Agriculture and Food Industry

Article Sidebar

PDF
Published: Dec 23, 2022
Updated: 2022-12-23
Versions:
2022-12-23 (2)
DOI: https://doi.org/10.48048/asi.2023.253049
Keywords:
Intellectual capital Profitability Efficiency Thai listed companies Agro and food industry

Main Article Content

Witchulada Vetchagool
The Faculty of Business Administration and Accountancy, Khon Kaen University, Khon Kaen 40002, Thailand

Abstract

This article examines the effect of Intellectual Capital (IC) on the performances of selected Thai listed companies in the Agro and Food industry from 2017 to 2019. The sample consisted of 45 companies with 135 observations spanning three years. The Modified Value-Added Intellectual Coefficient (MVAIC) model was used to measuring IC, including capital employed, human capital, structural capital, and relational capital. Performance was measured using two distinct parameters: profitability and efficiency. The regression results revealed that MVAIC and its components (excluding relational capital) had a significantly positive impact on firm profitability. However, only capital employed affected firm efficiency. This study confirms that IC efficiency significantly enhances profitability. Therefore, firm managers or policymakers can use the MVAIC model to monitor and assess their assets and create business strategies to achieve a competitive advantage. Furthermore, this model might be used by investors and shareholders to make better investment decisions and evaluate a firm’s market wealth.

Article Details

How to Cite
Vetchagool, W. (2022). The Effect of Intellectual Capital on Firm Profitability and Efficiency: Evidence from Thai Listed Companies in the Agriculture and Food Industry. Asia Social Issues, 16(1), e253049. https://doi.org/10.48048/asi.2023.253049 (Original work published November 11, 2022)
Issue
Vol. 16 No. 1 (2023): Asia Social Issues: January - February
Section
Research Article
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Copyright: CC BY-NC-ND 4.0

References

Alipour, M. (2012). The effect of intellectual capital on firm performance: An investigation of Iran insurance companies. Measuring Business Excellence, 16(1), 53-66.

Amin, S., Usman, M., Sohail, N., & Aslam, S. (2018). Relationship between intellectual capital and financial performance: The moderating role of knowledge assets. Pakistan Journal of Commerce and Social Science, 12(2), 521-547.

Appuhami, B. R. (2007). The Impact of intellectual capital on investors’ capital gains on shares : An empirical investigation of Thai banking, finance & insurance sector. Management Review, 3(2), 14-25.

Bontis, N. (1998). Intellectual capital: an exploratory study that develops measures and models. Management Decision, 36(2), 63-76.

Brooking, A. (1996). Intellectual capital: Core assets for the third millennium. London: Enterprise Thomson Business Press.

Carson, E., Ranzijn, R., Winefield, A., & Marsden, H. (2004). Intellectual capital: Mapping employee and work group attributes. Journal of Intellectual Capital, 5(3), 443-463.

Cricelli, L., Greco, M., Grimaldi, M., & Llanes Dueñas, L. P. (2018). Intellectual capital and university performance in emerging countries: Evidence from Colombian public universities. Journal of Intellectual Capital, 19(1), 71-95.

Dalwai, T., & Salehi, M. (2021). Business strategy, intellectual capital, firm performance, and bankruptcy risk: evidence from Oman’s non-financial sector companies. Asian Review of Accounting, 29(3), 474-504.

Edvinsson, L., & Malone, M. S. (1997). Intellectual capital: Realizing your company’s true value by finding its hidden brainpower. New York: Harper Business.

Firer, S., & Mitchell Williams, S. (2003). Intellectual capital and traditional measures of corporate performance. Journal of Intellectual Capital, 4(3), 348-360.

Hang Chan, K. (2009). Impact of intellectual capital on organisational performance: An empirical study of companies in the Hang Seng Index (Part 1). The Learning Organization, 16(1), 4-21.

Harrison, S., & Sullivan, P. H. (2000). Profiting from intellectual capital: Learning from leading companies. Journal of Intellectual Capital, 1(1), 33-46.

Hatane, S. E., Diandra, J. C., Tarigan, J., & Jie, F. (2021). Voluntary intellectual capital disclosure and earnings forecast in Indonesia–Malaysia–Thailand growth triangle’s pharmaceuticals sector. Retrieved from https://www.emerald.com/insight/content/doi/10.1108/IJOEM-01-2020-0028/full/pdf?title=voluntary-intellectual-capital-disclosure-and-earnings-forecast-in-indonesia-malaysia-thailand-growth-triangles-pharmaceuticals-sector

Hatane, S. E., Tarigan, J., Kuanda, E. S., & Cornelius, E. (2021). The contributing factors of intellectual capital disclosures in agriculture and mining sectors of Indonesia and Thailand. Accounting Research Journal, 35(2), 196-218.

Isola, W. A., Adeleye, B. N., & Olohunlana, A. O. (2020). Boardroom female participation, intellectual capital efficiency and firm performance in developing countries: Evidence from Nigeria. Journal of Economics, Finance and Administrative Science, 25(50), 413-424.

Jardon, C. M., & Martinez-Cobas, X. (2021). Measuring intellectual capital with financial data. PLoS ONE, 16(5), 1-19.

Kaplan, R. S., & Norton, D. P. (1996). Strategic learning & the balanced scorecard. Strategy & Leadership, 24(5), 18-24.

Kerdpitak, C., & Jermsittiparsert, K. (2019). Investigating the role of intellectual capital on the performance of pharmaceutical firms in Thailand. Systematic Reviews in Pharmacy, 10(2), 244-252.

Majumder, S. C., Appiah, B. K., & Cardorel, O. C. (2021). Determinants of market to book value and financial performance of Chinese listed firms: Implication of MVAIC model. International Journal of Learning and Intellectual Capital, 18(2), 131-153.

Mondal, A., & Ghosh, S. K. (2012). Intellectual capital and financial performance of Indian banks. Journal of Intellectual Capital, 13(4), 515-530.

Nadeem, M., Dumay, J., & Massaro, M. (2019). If you can measure it, you can manage it: A case of intellectual capital. Australian Accounting Review, 29(2), 395-407.

Nazari, J. A., & Herremans, I. M. (2007). Extended VAIC model: Measuring intellectual capital components. Journal of Intellectual Capital, 8(4), 595-609.

Nimtrakoon, S. (2015). The relationship between intellectual capital, firms’ market value and financial performance: Empirical evidence from the ASEAN. Journal of Intellectual Capital, 16(3), 587-618.

Phusavat, K., Comepa, N., Sitko-Lutek, A., & Ooi, K. B. (2011). Interrelationships between intellectual capital and performance: Empirical examination. Industrial Management & Data Systems, 111(6), 810-829.

Phusavat, K., Comepa, N., Sitko-Lutek, A., & Ooi, K. B. (2013). Productivity management: Integrating the intellectual capital. Industrial Management and Data Systems, 113(6), 840-855.

Pongpanich, R., Peng, K.-C., & Maichum, K. (2017). The performance measurement of listed companies of the agribusiness sector on the stock exchange of Thailand. Agricultural Economics (Czech Republic), 63(5), 234-245.

Pulic, A. (2000). VAIC - an accounting tool for IC management. International Journal of Technology Management, 20(5-8), 702-714.

Pulic, A. (2004). Intellectual capital - does it create or destroy value? Measuring Business Excellence, 8(1), 62-68.

Roslender, R., Stevenson, J., & Kahn, H. (2006). Employee wellness as intellectual capital: An accounting perspective. Journal of Human Resource Costing & Accounting, 10(1), 48-64.

Shahzad, F., Hussain Baig, M., Rehman, I. U., Latif, F., & Sergi, B. S. (2020). What drives the impact of women directors on firm performance? Evidence from intellectual capital efficiency of US listed firms. Journal of Intellectual Capital, 21(4), 513-530.

Soewarno, N., & Tjahjadi, B. (2020). Measures that matter: an empirical investigation of intellectual capital and financial performance of banking firms in Indonesia. Journal of Intellectual Capital, 21(6), 1085-1106.

Ståhle, P., Ståhle, S., & Aho, S. (2011). Value added intellectual coefficient (VAIC): A critical analysis. Journal of Intellectual Capital, 12(4), 531-551.

Stewart, T. A. (1997). Intellectual capital: The new wealth of organization. New York: Nicholas Brealey Publishing Limited.

Tran, D. B., & Vo, D. H. (2018). Should bankers be concerned with Intellectual capital? A study of the Thai banking sector. Journal of Intellectual Capital, 19(5), 897-914.

Ulum, I., Ghozali, I., & Purwanto, A. (2014). Intellectual capital performance of Indonesian banking sector: A modified VAIC (M-VAIC) perspective. Asian Journal of Finance & Accounting, 6(2), 103-123.

Vishnu, S., & Gupta, V. K. (2014). Intellectual capital and performance of pharmaceutical firms in India. Journal of Intellectual Capital, 15(1), 83-99.

Weqar, F., Khan, A. M., & Haque, S. M. I. (2020). Exploring the effect of intellectual capital on financial performance: a study of Indian banks. Measuring Business Excellence, 24(4), 511-529.

Weqar, F., Khan, A. M., Raushan, M. A., & Haque, S. M. I. (2021). Measuring the Impact of Intellectual Capital on the Financial Performance of the Finance Sector of India. Journal of the Knowledge Economy, 12(3), 1134-1151.

Wooldridge, J.M. (2010). Econometric analysis of cross section and panel data (2nd eds.). England: MIT Press.

Xu, J., & Li, J. (2019). The impact of intellectual capital on SMEs’ performance in China: Empirical evidence from non-high-tech vs. high-tech SMEs. Journal of Intellectual Capital, 20(4), 488-509.

Xu, J., & Liu, F. (2020). The impact of intellectual capital on firm performance: A modified and extended vaic model. Journal of Competitiveness, 12(1), 161-176.

Xu, J., & Wang, B. (2018). Intellectual capital, financial performance and companies’ sustainable growth: Evidence from the Korean manufacturing industry. Sustainability (Switzerland), 10(12), 1-15.

Xu, J., & Zhang, Y. (2021). Does Intellectual Capital Measurement Matter in Financial Performance? An Investigation of Chinese Agricultural Listed Companies. Agronomy, 11(9), 1-18.