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Intellectual capital efficiency and firms' financial performance based on business life cycle

Jian Xu (School of Economics and Management, Qingdao Agricultural University, Qingdao, China)
Muhammad Haris (Institute of Banking and Finance, Bahauddin Zakariya University,Multan, Pakistan)
Feng Liu (Business School, Shandong University at Weihai, Weihai, China)

Journal of Intellectual Capital

ISSN: 1469-1930

Article publication date: 15 March 2022

Issue publication date: 28 April 2023




The purpose of this paper is to investigate the impact of intellectual capital (IC) and its components (human, structural, relational and innovation capitals) on financial performance (FP) at different life cycle stages.


The study uses the data from Chinese manufacturing listed companies during 2014–2018. The modified value added intellectual coefficient (MVAIC) model is employed as the measurement of IC efficiency. Finally, multiple regression analysis is used to test the research hypotheses.


This study shows that the impact of IC on FP is different across life cycle stages. Specifically, at the birth stage, human capital (HC), structural capital (SC) and innovation capital (INC) have a positive impact on FP. At the growth and mature stages, all IC components contribute to FP improvement. HC and SC play an important role at the revival stage, while only HC positively affects FP at the decline stage.

Practical implications

The findings may help corporate managers to make optimal strategies to improve FP by effective utilization of IC resources in the complex and competitive business environment. Meanwhile, companies can invest in the core elements of IC at different stages of development, so as to maximize the contribution of IC to company value.


This is among the few studies to explore the impact of IC on FP of manufacturing listed companies in the Chinese context from the perspective of life cycle. It also makes novel contributions in measuring IC by the MVAIC model with the inclusion of relational capital and INC that are largely neglected in previous research.



The research was financially supported by the Shandong Provincial Humanities and Social Sciences Research Project (Grant Number 2021-YYGL-09) and the Scientific Research Foundation for High-level Talents of Qingdao Agricultural University (Grant Number 6631120701).


Xu, J., Haris, M. and Liu, F. (2023), "Intellectual capital efficiency and firms' financial performance based on business life cycle", Journal of Intellectual Capital, Vol. 24 No. 3, pp. 653-682.



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