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Article: Charting intellectual capital performance of the gateway to China

TitleCharting intellectual capital performance of the gateway to China
Authors
KeywordsChina
Hong Kong
Intellectual capital
Organizational performance
Value added
Issue Date2011
PublisherEmerald Group Publishing Limited. The Journal's web site is located at http://www.emeraldinsight.com/jic.htm
Citation
Journal Of Intellectual Capital, 2011, v. 12 n. 2, p. 249-276 How to Cite?
AbstractPurpose: This paper aims to investigate whether intellectual capital (IC) has an impact on the financial aspects of organizational performance as well as attempting to identify the IC components that are associated with corporate financial performance indicators that signal organizational growth. Design/methodology/approach: This study drew on financial data from publicly available annual reports of all the constituent companies of the Hang Seng Index of the Hong Kong Stock Exchange for the years 2001-2009. Following the value added intellectual coefficient™ (VAIC) methodology, regression models were constructed to examine the relationships between IC and the corporate financial performance indicators. Findings: Evidence was found to suggest that IC, as measured by VAIC, was positively associated with profitability of businesses. In particular, structural capital, as a key component of IC, played a notable part in enhancing corporate profitability, and showed a growing trend in its significance. Empirical findings, based on correlation and linear multiple regression analysis, indicated that the components of VAIC were strong predictors of corporate financial performance such as return on equity and profitability. In particular, capital employed efficiency (CEE) was a significant predictor of all four corporate financial performance indicators. Practical implications: The results may extend the understanding of the role of IC in business operations in Hong Kong, and may help to identify the specific IC drivers that may have a direct impact on the financial performance of these companies. In particular, although CEE was a significant predictor of all four corporate finance performance indicators, the increasing contribution of structural capital efficiency (SCE) in predicting ROA and ROE was observed. The role that structural capital plays in strengthening business performance warrants further investigation. Originality/value: There has only been one previous empirical study on the intellectual capital of constituent companies on the Hong Kong Hang Seng Index. This study adds to the literature as the second study in the field. It is the first comparative study across two time periods of the above-mentioned data. © Emerald Group Publishing Limited.
Persistent Identifierhttp://hdl.handle.net/10722/135615
ISSN
2015 SCImago Journal Rankings: 0.726
References

 

DC FieldValueLanguage
dc.contributor.authorChu, SKWen_HK
dc.contributor.authorChan, KHen_HK
dc.contributor.authorWu, WWYen_HK
dc.date.accessioned2011-07-27T01:37:33Z-
dc.date.available2011-07-27T01:37:33Z-
dc.date.issued2011en_HK
dc.identifier.citationJournal Of Intellectual Capital, 2011, v. 12 n. 2, p. 249-276en_HK
dc.identifier.issn1469-1930en_HK
dc.identifier.urihttp://hdl.handle.net/10722/135615-
dc.description.abstractPurpose: This paper aims to investigate whether intellectual capital (IC) has an impact on the financial aspects of organizational performance as well as attempting to identify the IC components that are associated with corporate financial performance indicators that signal organizational growth. Design/methodology/approach: This study drew on financial data from publicly available annual reports of all the constituent companies of the Hang Seng Index of the Hong Kong Stock Exchange for the years 2001-2009. Following the value added intellectual coefficient™ (VAIC) methodology, regression models were constructed to examine the relationships between IC and the corporate financial performance indicators. Findings: Evidence was found to suggest that IC, as measured by VAIC, was positively associated with profitability of businesses. In particular, structural capital, as a key component of IC, played a notable part in enhancing corporate profitability, and showed a growing trend in its significance. Empirical findings, based on correlation and linear multiple regression analysis, indicated that the components of VAIC were strong predictors of corporate financial performance such as return on equity and profitability. In particular, capital employed efficiency (CEE) was a significant predictor of all four corporate financial performance indicators. Practical implications: The results may extend the understanding of the role of IC in business operations in Hong Kong, and may help to identify the specific IC drivers that may have a direct impact on the financial performance of these companies. In particular, although CEE was a significant predictor of all four corporate finance performance indicators, the increasing contribution of structural capital efficiency (SCE) in predicting ROA and ROE was observed. The role that structural capital plays in strengthening business performance warrants further investigation. Originality/value: There has only been one previous empirical study on the intellectual capital of constituent companies on the Hong Kong Hang Seng Index. This study adds to the literature as the second study in the field. It is the first comparative study across two time periods of the above-mentioned data. © Emerald Group Publishing Limited.en_HK
dc.languageengen_US
dc.publisherEmerald Group Publishing Limited. The Journal's web site is located at http://www.emeraldinsight.com/jic.htmen_HK
dc.relation.ispartofJournal of Intellectual Capitalen_HK
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectChinaen_HK
dc.subjectHong Kongen_HK
dc.subjectIntellectual capitalen_HK
dc.subjectOrganizational performanceen_HK
dc.subjectValue addeden_HK
dc.titleCharting intellectual capital performance of the gateway to Chinaen_HK
dc.typeArticleen_HK
dc.identifier.emailChu, SKW: samchu@hku.hken_HK
dc.identifier.authorityChu, SKW=rp00897en_HK
dc.description.naturepublished_or_final_version-
dc.identifier.doi10.1108/14691931111123412en_HK
dc.identifier.scopuseid_2-s2.0-79955668947en_HK
dc.identifier.hkuros188430en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-79955668947&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume12en_HK
dc.identifier.issue2en_HK
dc.identifier.spage249en_HK
dc.identifier.epage276en_HK
dc.publisher.placeUnited Kingdomen_HK
dc.identifier.scopusauthoridChu, SKW=9943688000en_HK
dc.identifier.scopusauthoridChan, KH=26028252100en_HK
dc.identifier.scopusauthoridWu, WWY=7407080554en_HK
dc.identifier.citeulike9250768-

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