Relationship between intellectual capital and corporate performance of top Pakistani companies: an empirical evidence

Abstract

The aim of this study is to empirically ascertain the intellectual capital (IC) performance of top 100 companies on the Karachi stock exchange of Pakistan and to examine the effect of different IC elements on corporate performance. This study uses PLS-SEM to develop a path model between IC and corporate performance. The results of this study conclude that the human capital efficiency plays an important role in forming IC in relationship with corporate performance. Structural capital efficiency is a very poor contributor in making IC as its impact is non-significant. However, the capital employed efficiency is contributing significantly towards IC. The relationship between IC and corporate performance is significantly positive which shows that IC performance in top companies of Pakistan is promisingly contributing towards corporate performance. The study offers empirical evidence that a company with better IC resources produces more return on investment, return on equity and productivity.