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Intellectual capital and firm performance in Australia

Martin Clarke (Deloitte, Auckland, New Zealand)
Dyna Seng (Department of Accountancy and Finance, University of Otago, Dunedin, New Zealand)
Rosalind H. Whiting (Department of Accountancy and Finance, University of Otago, Dunedin, New Zealand)

Journal of Intellectual Capital

ISSN: 1469-1930

Article publication date: 25 October 2011




This study aims to examine the effect intellectual capital (IC) has on firm performance of Australian companies.


Quantitative data are collected for Australian companies listed between 2004 and 2008. IC is measured using Pulic's value added intellectual coefficient (VAIC) and its components (human, structural and capital employed efficiencies (HCE, SCE, CEE)). Direct and moderating relationships between VAIC, HCE, SCE, and CEE and four measures of performance are statistically analysed.


The results suggest that there is a direct relationship between VAIC and performance of Australian publicly listed firms, particularly with CEE and to a lesser extent with HCE. A positive relationship between HCE and SCE in the prior year and performance in the current year is also found. However evidence also suggests the possibility of an alternative moderating relationship between the IC components of HCE and SCE with physical and financial capital (CEE) which impacts on firm performance.

Research limitations/implications

There are some missing data and some transgression of the assumptions of OLS regression.


This paper presents the first study of the IC relationship with firm performance in Australia. Inconclusive results from prior studies in developing countries suggested the need for a study from a developed country such as Australia. The paper is also the first to investigate whether IC moderates the relationship between CEE and firm performance.



Clarke, M., Seng, D. and Whiting, R.H. (2011), "Intellectual capital and firm performance in Australia", Journal of Intellectual Capital, Vol. 12 No. 4, pp. 505-530.



Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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