Impact of intellectual capital on profitability and market value in an emerging economy: An inter-company analysis of firms listed in the Philippine stock market

• Main Authors: Alvarez, Jerome D., Bolanos, Remielee Jayne B., Tan, Alyssa Danica L., Tiu, Samantha Nicole B.
• Format: text
• Language: English
• Published: Animo Repository 2015
• Subjects: Intellectual capital > Philippines; Profit > Philippines
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7970
• Institution: De La Salle University

Intellectual capital is undoubtedly an element of a companys performance and profitability. This paper presents the relationship between the level of intellectual capital efficiency in terms of capital employed, human capital and structural capital, upon which incorporated is called value added intellectual coefficient (VAIC) with the publicly listed Philippine companies profitability and market value. This accounting-based perspective includes return on asset (ROA), return on equity (ROE) and price-to-book ratio (P/B Ratio). Overall results showed the relationship of intellectual capital to the profitability and market value of 180 Philippine companies listed in the Philippine Stock Exchange over the period 2009-2013. Moreover, the results showed that human capital efficiency (HCE) has no significant impact on ROA, ROE and P/B Ratio. Meanwhile, capital employed efficiency (CEE) and structural capital efficiency (SCE) exhibited a strong positive correlation with the firms ROE and P/B ratio, respectively. Lastly, intellectual capital as a whole exhibits a joint significant effect on P/B Ratio only. This implies that some of the intellectual capital coefficients should be given attention in building value for companies. Also, this study suggests future research to explore more on the structure of VAIC model to achieve more accurate results as to how intellectual capital is of aid to the wealth creation of companies.