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Intellectual capital and firm efficiency of US multinational software firms

Ncamsile Ashley Nkambule (Department of Accounting, Yuan Ze University, Taoyuan, Taiwan)
Wei-Kang Wang (Department of Accounting, Yuan Ze University, Taoyuan, Taiwan)
Irene Wei Kiong Ting (Benchmarking Research Group, Faculty of Accounting, Ton Duc Thang University, Ho Chi Minh City, Vietnam)
Wen-Min Lu (International Business Administration, Chinese Culture University, Taipei, Taiwan)

Journal of Intellectual Capital

ISSN: 1469-1930

Article publication date: 14 September 2021

Issue publication date: 27 September 2022

369

Abstract

Purpose

The main purpose of this study is to empirically investigate the impact of intellectual capital efficiency on US multinational software companies' performance from 2012 to 2016 by applying data envelopment analysis (DEA).

Design/methodology/approach

It adopts a new slacks-based measure (SBM) to obtain a more accurate performance estimation and rank between companies. Regression analysis is used to test the overall IC and each of its elements (Human Capital, Innovation Capital, Process Capital and Customer Capital).

Findings

The univariate result shows that multinational companies are more efficient than non-multinational companies. However, the regression result shows that multinationality can hardly explain the firm efficiency of software firms. Another interesting finding is that intellectual capital has a positive and significant impact on software firm performance in the US human capital influences firm efficiency directly. However, when human capital is combined with the other elements of IC, the contribution of human capital becomes less significant. This is because people may think that innovation capital, process capital and customer capital can replace human capital, but it is not. In short, human capital may affect firm efficiency through other elements of IC (innovation capital, process capital and customer capital) as it is the base of other elements.

Research limitations/implications

The results show that multinational companies have higher efficiency scores than non-multinational companies. In addition, Intellectual capital has a positive and significant impact on software firm performance in the US human capital influences firm efficiency directly. However, when human capital is combined with the other elements of IC, the contribution of human capital becomes less significant. This is because people may think that innovation capital, process capital and customer capital can replace human capital, but it is not. In short, human capital may affect firm efficiency through other elements of IC (innovation capital, process capital and customer capital) as it is the base of other elements.

Practical implications

Overall, the study highlights the needs of having intellectual capital and its elements (Human Capital, Innovation Capital, Process Capital and Customer Capital) to increase firm efficiency.

Originality/value

First, the authors use a more comprehensive elements of IC, which are human capital, innovation capital, process capital and customer capital for a better IC measurement. Second, this study makes the first attempt using the DSBM model via DEA to examine the operating efficiency of US multinational software firms.

Keywords

Acknowledgements

This research is funded by the Foundation for Science and Technology Development of Ton Duc Thang University (FOSTECT), website: http://fostect.tdtu.edu.vn, under Grant FOSTECT.2019.B.14.

Citation

Nkambule, N.A., Wang, W.-K., Ting, I.W.K. and Lu, W.-M. (2022), "Intellectual capital and firm efficiency of US multinational software firms", Journal of Intellectual Capital, Vol. 23 No. 6, pp. 1404-1434. https://doi.org/10.1108/JIC-02-2021-0041

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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