Testing the relationship between intellectual capital and a company’s performance: Evidence from South Africa

Abstract

The aim of this study was to investigate whether the performance of a company’s intellectual capital can explain organisational performance. The dimensions of a company’s performance are (1) profitability, (2) productivity and (3) market valuation. Data were obtained from a sample of 65 companies that are listed on the JSE Securities Exchange (high knowledge‐base sectors). Findings from the empirical analysis indicate that the relationships between the performance of a company’s intellectual capital and (1) profitability, (2) productivity and (3) market valuation are informative but varied. The empirical findings suggest that the performance of a company’s intellectual capital can explain profitability and productivity, but not market valuation.

Citation

Firer, S. and Stainbank, L. (2003), "Testing the relationship between intellectual capital and a company’s performance: Evidence from South Africa", Meditari Accountancy Research, Vol. 11 No. 1, pp. 25-44. https://doi.org/10.1108/10222529200300003