Intellectual capital and traditional measures of corporate performance

• Published in: Journal of intellectual capital Vol. 4; no. 3; pp. 348 - 360
• Main Authors: Firer, Steven, Mitchell Williams, S.
• Format: Journal Article
• Language: English
• Published: Bradford MCB UP Ltd 01.09.2003; Emerald Group Publishing Limited
• Subjects: Accounting; Capital assets; Correlation analysis; Efficiency; Emerging markets; Employees; Intangible assets; Intellectual capital; Natural resources; Productivity; R&D; Research & development; Stockholders; Studies; Valuation; Value added; South Africa; Intellectual capital; South Africa; Productivity rate
• ISSN: 1469-1930; 1758-7468
• DOI: 10.1108/14691930310487806

The principal purpose of this study is to investigate the association between the efficiency of value added (VA) by the major components of a firm's resource base (physical capital, human capital and structural capital) and three traditional dimensions of corporate performance: profitability, productivity, and market valuation. Data are drawn from a sample of 75 publicly traded firms from South Africa from business sectors heavily reliant on intellectual capital. Empirical analysis is conducted using correlation and linear multiple regression analysis. Findings from the empirical analysis indicate that associations between the efficiency of VA by a firm's major resource bases and profitability, productivity and market valuation are generally limited and mixed. Overall, the empirical findings suggest that physical capital remains the most significant underlying resource of corporate performance in South Africa despite efforts to increase the nation's intellectual capital base.