Published Online:October 2024
Product Name:The IUP Journal of Knowledge Management
Product Type:Article
Product Code:IJKM021024
Author Name:Anchal Bansal, Silender Singh and Priya Bansal
Availability:YES
Subject/Domain:Strategic
Download Format:PDF
Pages:19
The increasing significance of intellectual capital as a fundamental driver of organizational success has spurred a growing body of research focused on its measurement and impact on financial performance and market valuation. This paper provides a thorough review of the literature on this topic, with particular attention to the use of the Value-Added Intellectual Coefficient (VAIC) model. The review spans a diverse array of studies published in academic journals, books, and conference proceedings. By analyzing these studies, the paper uncovers the theoretical foundations, methodologies, and findings related to the application of the VAIC model in assessing the influence of intellectual capital on financial performance and market valuation. Overall, the findings indicate a positive relationship between intellectual capital, as measured by the VAIC model, and financial performance indicators such as profitability, productivity, and efficiency. Moreover, there is evidence supporting a positive connection between intellectual capital and market valuation, suggesting that investors recognize and reward firms with higher intellectual capital. Nonetheless, the review also highlights several limitations and challenges in the literature, including the inconsistencies in the operationalization of intellectual capital, the complexities of measuring intangible assets, and the potential endogeneity between intellectual capital and financial performance metrics. This review contributes to the existing knowledge base by synthesizing the findings from previous studies and outlining directions for future research.
Intellectual capital (IC), comprising intangible assets such as knowledge, creativity, and intellectual property, has emerged as a significant predictor of organizational success and competitive advantage in today’s knowledge-based economy (Edvinsson and Malone, 1997).