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The purpose of this study is to analyse the validity of the value added intellectual coefficient (VAIC) method as an indicator of intellectual capital.

The paper describes VAIC through its calculation formulae and aims to establish what exactly it is that the method measures. It also looks in detail at how intellectual capital is understood in the method, and discusses its conceptual confusions. Furthermore, the paper tests the hypothesis according to which VAIC correlates with a company's stock market value, and reflects the contradictory results of earlier studies.

The analyses show, first, that VAIC indicates the efficiency of the company's labour and capital investments, and has nothing to do with intellectual capital. Furthermore, the calculation method uses overlapping variables and has other serious validity problems. Second, the results do not lend support to the hypothesis that VAIC correlates with a company's stock market value. The main reasons behind the lack of consistency in earlier VAIC results lie in the confusion of capitalized and cash flow entities in the calculation of structural capital and in the misuse of intellectual capital concepts.

The analyses show that VAIC is an invalid measure of intellectual capital.

The result is important since the method has been widely used in micro and macro level analyses, but this is the first time it has been put to rigorous scientific analysis.

The purpose of this paper is to analyse the role of value added (VA) as an indicator of intellectual capital (IC), and its impact on the firm's economic, financial and stock market performance.

The value added intellectual coefficient (VAIC™) method is used on 300 UK companies divided into three groups of industries: high‐tech, traditional and services. Data require to calculate VAIC™ method are obtained from the “Value Added Scoreboard” provided by the UK Department of Trade and Industry (DTI). Empirical analysis is conducted using correlation and linear multiple regression analysis.

The results show that companies' IC has a positive impact on economic and financial performance. However, the association between IC and stock market performance is only significant for high‐tech industries. The results also indicate that capital employed remains a major determinant of financial and stock market performance although it has a negative impact on economic performance.

The VAIC™ method could be an important tool for many decision makers to integrate IC in their decision process.

This is the first research which has used the data on VA recently calculated and published by the UK DTI in the “Value Added Scoreboard”. This paper constitutes therefore a kind of validation of the ministry data.

The purpose of this paper is to examine the impact of intellectual capital and its components on bank diversification choice.

Both asset and income diversification are computed and an unbalanced panel data set of 32 banks covering the period 2000–2015 have been used. The panel corrected standard error regression has been used to account for serial correlation and heteroscedasticity.

The study found that intellectual capital determines the choice of diversifying. Precisely, intellectual capital motivates asset diversity but it dissuades income diversification. Human capital and structural capital are major components that determine asset diversity decisions. Income diversification decision, in this case to choose a focus strategy, is determined by human capital. This gives credence for the human capital theory in Ghana. Competition encourages a focus strategy. Bank size and leverage enhances income diversification while stock exchange listing and government ownership fosters the focus strategy.

Diversification strategy, knowledge base of staff, corporate governance and internal control have been considered as factors leading to the collapse of some Ghanaian banks in 2017–2018. The study provides relevant insights for regulators, decision support units and corporate boards. Intellectual capital and value added metrics should be used for modelling and decision making as they have value relevance.

This is a premier study that has examined the nexus between diversification strategy and intellectual capital in banks.

This paper seeks to estimate and analyze the relationship between intellectual capital and corporate conventional financial performance measures of Indian software and pharmaceutical companies for a period of five years from 2002 to 2006.

Annual reports, especially the profit and loss accounts and balance sheets of the selected companies for the relevant years have been used to obtain the data. International literatures on intellectual capital with specific reference to measurement tools and techniques have been reviewed. Value Added Intellectual Coefficient^TM (VAIC) method is applied for measuring the value based performance of the companies. Corporate conventional performance financial measures used in this analysis are: profitability; productivity; and market valuation. It is an empirical study using multiple regression analysis for the data analysis. The intellectual capital (human capital and structural capital) and physical capital of the arbitrarily selected companies have been analyzed and their impact on corporate performance has been measured using multiple regression technique.

The analysis indicates that the relationships between the performance of a company's intellectual capital and conventional performance indicators, namely, profitability, productivity and market valuation, are varied. The findings suggest that the performance of a company's intellectual capital can explain profitability but not productivity and market valuation in India.

The study has been conducted on a small sample of 80 companies belonging to the India software and pharmaceutical sectors. For a better understanding, a larger data set covering all prominent industry segments will be helpful.

Intellectual capital is an area of interest to numerous parties, e.g. shareholders, managers, policy makers, institutional investors. This paper throws some light on the new performance indicator, which Indian managers can use in order to evaluate the corporate performance and benchmark it with global standards. This is useful particularly in the context of the “knowledge economic” environment.

The paper represents a pioneering attempt to understand the implications of the business performance of the Indian software and pharmaceutical sectors from an intellectual resource perspective.

The purpose of this paper is to empirically investigate if intellectual capital (IC) has an impact on organizational performance as well as to identify the IC components that may be the drivers of the traditional indicators of business success. The study sought evidence from the multinational companies which conduct their business in Serbia.

By using data from 37 multinational companies which established their business in Serbia from 2006 to 2008 and applying the VAIC methodology for generating independent variables which reflect IC, regression models were constructed to examine the relationships between the efficient use of MNCs' human and structural capital and corporate performance measures: return on assets, return on equity and productivity.

The results of this study reveal that human capital is positively associated with all three corporate performance measures. The hypothesis regarding a positive association between structural capital and MNCs' profitability and productivity has been confirmed only partially since the results indicate that the structural capital variable shows a statistically significant and positive relationship only with the performance measure ‐ return on equity.

This is the first empirical study conducted in Serbia testing the relationship between IC and organizational performance. It contributes to the existing IC literature by giving new insights into the IC of MNCs' subsidiaries established in Serbia and its relationship with their business performance.

The purpose of this paper is to investigate the significance of board gender diversity (BGD) on the firm's intellectual capital (IC) performance of 272 Indian firms listed on the National Stock Exchange during 2007–2019. Considering the recent regulatory amendment by the Indian regulatory system (Security Exchange Board of India, 2018) which mandates at least one female independent directors on boards of all listed companies.

Based on theories and literature reviews, hypotheses were developed. This paper uses the proportion of female director on board and proportion of female independent directors to measure BGD and modified value-added intellectual coefficient (MVAIC) methodology to measure firms' IC performance. Two-step system-generalised method of moment panel data regression analysis has been employed to identify the variables that significantly affect IC performance.

This paper finds female representation on boards has a significant impact on MVAIC; capital employed efficiency shows the strongest association with female directors on board, followed by structural capital efficiency and human capital efficiency, while relational capital efficiency shows no significant effect. The results further demonstrate that female independent director has a significant but negative impact on IC.

As the study is limited to the listed firms of an emerging economy with a mandatory female quota for boards. Thus to increase the generalizability of findings, future research can be extended to include all listed and non-listed firms from another emerging economy with a mandatory female quota.

From the practical perspective, this study bridges the gap between theory and practice in terms of providing a deeper understanding to the policymakers and Indian regulatory bodies like the Ministry of Corporate Affairs and Securities Exchange Board on the importance of including female members on board as a vital contributing factor for leveraging firm's intangible performance.

Using resource dependency theory and agency, this study extends the literature on IC efficiency and female representation on boards by presenting the research outcome for Indian listed firms. This paper, addressing the recent changes introduced by Indian regulators and using the female independent directors on board, is amongst the first attempts to assess the relevance of BGD and IC performance. This issue has still not been discussed and analysed by researchers in India.

Value-added intellectual coefficient (VAIC) is extensively used as a measure of intellectual capital (IC), but it is criticized for not capturing the totality of IC. Therefore, this study aims to analyse critiques of the original VAIC and proposes a modified VAIC by adding missing IC components and adjusting for exogenous factors. The study uses a modified VAIC model to investigate the relationship between IC, firm performance (FP) and market value (MV) for US non-financial firms.

This study employed fundamental data of US non-financial firms listed on the NYSE and NASDAQ from 1980 to 2019. A final sample consisted of 6,019 firms and 62,686 firm-year observations.

The results provide a significant positive effect of aggregate and components of modified VAIC on FP and MV. Moreover, results validate the modified VAIC model and find that the modified VAIC explains changes in shareholders' MV. In addition, findings indicate that modified VAIC serves as an additional intangible factor to explain firms' capital structure decisions.

The findings have important implications for management, owners, researchers and investors.

The modified VAIC model differs from the original VAIC model in four ways: first, it corrects the measurement of structural capital efficiency (SCE) following the accounting principle. Second, it replaces SCE with innovation capital efficiency (InVCE) and relational capital efficiency (RCE) to account for missing components of information of structural capital (SC). Third, the modified VAIC model adjusts for exogenous factors like business cycles and cross-industry variations. Finally, with the addition of InVCE and RCE as components of SCE, innovation capital (InVC) and relational capital (RC) are added to the calculation of value-added (VA) as components of IC.

The purpose of this paper is twofold: to know whether those firms that achieve greater efficiency from their intangible resources (intellectual capital) also obtain greater performance; and to analyze the moderating role of family management on that relationship in small to medium-sized enterprises (SMEs).

This paper conducts an empirical study with different econometric models using a panel data sample of 6,132 paired firm-year observations from Spanish manufacturing SMEs in the period 2000–2013.

The findings suggest that intellectual capital efficiency is a key factor that allows the firm to achieve and maintain competitive advantages, obtaining greater performance. Additionally, this research also shows that the moderating role of family management can be a double-edged sword depending on the type of intangible resources.

This paper may give managers an insight in how to better utilize and manage intangible resources available in their firms to improve competitive advantage and ultimately firm performance. Additionally, on the basis of the Socioemotional Wealth perspective (SEW), this article argues that family-managed firms that focus on SEW preservation can enhance the impact of structural capital efficiency on performance.

This paper extends the prior literature by studying the joint effects of intellectual capital efficiency, distinguishing between human capital and structural capital efficiency, and family management on performance in the context of SMEs.

The purpose of this paper is to investigate the effect of being located in a science park (SP) on the level of a firm's intellectual capital (IC) performance.

Using a sample of 183 Italian firms (i.e. 61 tenant and 122 non-tenant firms), and through the GLS technique, the authors regress the firms’ IC performance across various explicative variables including a dummy that discriminates tenant and non-tenant firms.

Consistently with expectations, the results show that the location of a firm in a SP leads to improved IC performance. Moreover, the authors find that some other firm characteristics, such as size, age, and leverage, are important predictors of its IC-based performance.

The sample is small and the impact on performance might be biased by factors related to the regional context (e.g. level of industrialization, quality of education, and science system).

Implications for policy makers: support the growth of firms in SPs especially in those industries full of firms with scarce performance in IC. Implications for SP managers: they could “sell” (in terms of marketing) to both entrepreneurs to attract and policy makers this result. Implications for institutional investors: they should look at SPs with greater interest to find high-quality firms and improve their screening activity.

This paper aims to extend literature about factors explaining the level of a firm's IC performance and the current understanding of the impact of SPs at firm level.

The prime intention of this study is to examine the influence of intellectual capital (IC) on the financial performance of Indian companies listed on Standard and Poor Bombay Stock Exchange Sensitive Index (BSE SENSEX).

The study employs the data of 30 most significant and most prominent companies of India listed on BSE SENSEX for 10 years from 2009–2010 to 2018–2019. Value Added Intellectual Coefficient (VAIC^TM) methodology developed by Pulic (2000) was employed for measuring the efficiency of the IC.

The efficiency of IC is substantially and positively associated with the financial performance of the Indian companies as measured by return on assets (ROA), market-to-book (MB) ratio and return on equity (ROE). Amongst the three dimensions of VAIC, capital employed efficiency (CEE) was the most vital element in contributing to the firm financial performance, followed by human capital efficiency (HCE). Structural capital efficiency (SCE) only helps in enhancing the ROA of Indian firms.

The study results are only restricted to the 30 companies of India listed on S&P BSE SENSEX Index. Thus generalization of the result needs especial caution.

The study fills the void in the current literature of IC and business performance and extends the understanding of their relationship by providing empirical evidence.