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Estimating Intellectual Capital and its Impact on Firms’ Performance : Use of A-VAIC and M-VAIC Models


Affiliations
1 Symbiosis Centre for Management Studies, Noida, Symbiosis International (Deemed University), Plot No. 47 & 48, Block A, Sector 62, Noida - 201 301, Uttar Pradesh, India
2 Anil Surendra Modi School of Commerce, NMIMS, 7th Floor, V.L. Mehta Road, Vile-Parle (West), Mumbai - 400 056, Maharashtra, India

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The study examined the contribution of intellectual capital to companies’ overall performance. Also, a comparison between the effectiveness of the adjusted value-added intellectual coefficient (A-VAIC) and the modified value-added intellectual coefficient (M-VAIC) model for estimating IC components and analyzing their impact on firms’ performance was attempted. The study was carried out for 405 Indian companies listed on the NSE-500 index for 10 years (2010–2011 to 2019–2020). It was found in the results that intellectual capital is indeed helpful in improving firms’ financial and market performance. However, the M-VAIC is more detailed and precise. Hence, the IC components estimated using it can explain companies’ performance more effectively than the A-VAIC.

Keywords

Intellectual Capital, M-VAIC, A-VAIC, Financial Performance, Market Performance, India.

JELClassification Codes : C4, G32, M41, L1

Paper Submission Date : July 30, 2021 ; Paper sent back for Revision : July 11, 2022 ; Paper Acceptance Date : October 10, 2022 ; Paper Published Online : January 15, 2023

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  • Estimating Intellectual Capital and its Impact on Firms’ Performance : Use of A-VAIC and M-VAIC Models

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Authors

Kanishka Gupta
Symbiosis Centre for Management Studies, Noida, Symbiosis International (Deemed University), Plot No. 47 & 48, Block A, Sector 62, Noida - 201 301, Uttar Pradesh, India
Dolly Gaur
Symbiosis Centre for Management Studies, Noida, Symbiosis International (Deemed University), Plot No. 47 & 48, Block A, Sector 62, Noida - 201 301, Uttar Pradesh, India
Prakash Bhatia
Anil Surendra Modi School of Commerce, NMIMS, 7th Floor, V.L. Mehta Road, Vile-Parle (West), Mumbai - 400 056, Maharashtra, India

Abstract


The study examined the contribution of intellectual capital to companies’ overall performance. Also, a comparison between the effectiveness of the adjusted value-added intellectual coefficient (A-VAIC) and the modified value-added intellectual coefficient (M-VAIC) model for estimating IC components and analyzing their impact on firms’ performance was attempted. The study was carried out for 405 Indian companies listed on the NSE-500 index for 10 years (2010–2011 to 2019–2020). It was found in the results that intellectual capital is indeed helpful in improving firms’ financial and market performance. However, the M-VAIC is more detailed and precise. Hence, the IC components estimated using it can explain companies’ performance more effectively than the A-VAIC.

Keywords


Intellectual Capital, M-VAIC, A-VAIC, Financial Performance, Market Performance, India.

JELClassification Codes : C4, G32, M41, L1

Paper Submission Date : July 30, 2021 ; Paper sent back for Revision : July 11, 2022 ; Paper Acceptance Date : October 10, 2022 ; Paper Published Online : January 15, 2023


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DOI: https://doi.org/10.17010/ijf%2F2023%2Fv17i1%2F172600