Impact of firm's intellectual capital on firm performance: a study of Indian firms and the moderating effects of age and gender
| DOI | https://doi.org/10.1108/JIC-12-2020-0378 |
| Published date | 25 May 2021 |
| Date | 25 May 2021 |
| Pages | 103-126 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Sheshadri Chatterjee,Ranjan Chaudhuri,Alkis Thrassou,Georgia Sakka |
Impact of firm’s intellectual capital
on firm performance: a study of
Indian firms and the moderating
effects of age and gender
Sheshadri Chatterjee
IIT Kharagpur, Kharagpur, India
Ranjan Chaudhuri
Marketing Management, NITIE, Mumbai, India, and
Alkis Thrassou and Georgia Sakka
University of Nicosia, Nicosia, Cyprus
Abstract
Purpose –The purpose of this study is to empirically examine the impact of Indianfirms’intellectual capital
on firm performance, as well as the moderating effects of age and gender therein.
Design/methodology/approach–The research initially develops a theoretical model, through extant works
and theories, which is subsequently empirically validated using the partial least square structural equation
modeling technique with 328 respondents from 12 Indian firms.
Findings –The study concludes that specific dimensions of firms’intellectual capital, including structural
capital, human capital and customer capital, positively and significantly impact firm performance, which in
turn provides the firm competitive advantages. The study also finds that there are significant moderating
effects of age and gender on the relationship between firm’s intellectual capital and firm performance.
Research limitations/implications –Further to its evident contribution to scholarly knowledge and its
provision of a validated model, which could be used in other emerging and developed markets as well, the
research provides valuable practicable directions to firm executives regarding the importance and utilization of
the structural, human and customer capital in impro ving firm performance and strengthening its
competitive edge.
Originality/value –The study adds valuable knowledge to the body of literature on intellectual capital,
through its explicit empirical findings, as well as through its focus on the significant emerging market of India.
Keywords Intellectual capital, Structural capital, Human capital, Customer capital, Firm performance, Age,
Gender, India, Emerging markets
Paper type Research paper
1. Introduction
In the past decade, the emergence of the knowledge economy has recognized intellectual
capital (IC) as a vital and determining factor, driving the economic growth and innovation
of a firm (Yaseen et al., 2016;Kar and Chatterjee, 2018a). IC is considered an essential and
most important intangible resource. And, though difficult to measure, its value to firm
performance (FP) andcompetitive advantage (CA) remains undisputed. Traditionally, land,
labor and financial capital are construed as a firm’s assets, but IC is a fourth factor that acts
as an intangible driver of value (Rupcic, 2019). IC has many definitions and dimension s with
multifarious terminologies and aspects. Stewart (1991,p.4)definedICas“the intangi ble
assets that could be used by an organization to create value.”However, most scholars of IC
agree that three dimensions are mainly dominant: human capital (HC), structural capital
(SC) and customer capital (CC) (Sumedrea, 2013;Secundo et al., 2018;Kar and Chatterjee,
2018b). CC is interpreted in the context of establishing a relation between the firms and the
customers. In this respect, CC may be conceptualized as relational capital, in a broader
Impact of
firm’s
intellectual
capital
103
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 16 December 2020
Revised 11 February 2021
26 March 2021
Accepted 28 April 2021
Journal of Intellectual Capital
Vol. 23 No. 1, 2022
pp. 103-126
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-12-2020-0378
sense (Pedro et al.,2018;Festa et a l.,2021).CC helps in the creation of values that strengthen
the relationship between customers and the firms (Castaneda et al., 2015;Meles et al., 2016).
CC is related to the concept by mobilizing the relationship between the stakeholders and by
best utilizing the knowledge resources with the help of social structure (Hus and Wang,
2012;Ling-Ching Chan and Wang, 2012;Hariyati et al., 2019). These three dimensions are
perceivedtoplayapivotalroleinleveragingtheperformanceofafirm(Mehralian et al.,
2018). Although several studies on IC and its connection with FP have been conducted in
western business settings (Yaseen et al., 2016;Gupta et al., 2018b), little attention has
been paid to study the sociological, managerial and psychological challenges to the
development of different forms of IC in the fastest developing countries. This research
closes this gap by investigating how these challenges in the context of IC could impact FP
and be instrumental for sustaining CA of and within emerging markets, particularly in
India (Gupta et al., 2018a;Kar and Chatterjee, 2019). Toward this aim, this research pursues
the following objectives:
(1) To identify the different dimensions of IC of a fi rm from the sociological,
psychological and managerial perspectives;
(2) To examine the impacts of a firm’s IC on FP; and
(3) To investigate the moderating effects of age and gender on the relationships between
different dimensions of IC and FP.
The remaining parts of the article are arranged as follows. Next, an extensive review of extant
studies on the subject is being undertaken and presented. Thereafter, theories are being
developed, followed by the formulation of hypotheses for developing the conceptual model.
Subsequently, the research methodology and analysis are presented, and the results are
discussed along with their theoretical and practical implications. Finally, comprehensive
conclusions are drawn, and avenues for further research are identified.
2. Research context
During the past two decades, the concept of interdisciplinary IC has attracted the interest of
many researchers (Morariu, 2014;Piekkola, 2020;Ting et al., 2020), who have defined the
concept in various ways. It has been interpreted as a comparison between a firm’s accounting
value and marketing value (Stewart and Stephanie, 1994;Sreenivasulu and Chatterjee, 2019;
Nguyen et al., 2019;Kizgin et al., 2019;Shahwan and Habib, 2020). It is considered to be
knowledge that creates value for a firm (Edvinsson and Malone, 1997;Vrontis et al., 2021). It is
conceptualized as the sum of all types of knowledge in a firm’s operational abilities to achieve
better CA (Youndt et al., 2004;Christofi et al., 2018;Thrassou et al., 2020). The different
interpretations of IC lead to the conclusion that IC includes abilities and resources that are
valuable, rare, inimitable and non-substitutable. If a firm can achieve this, it can ensure better
performance along with sustainable CA (Zlatkovic, 2018;Bhattacharjee et al., 2020;
Chatterjee, 2020;Ghosh et al., 2020).
Different scholars have classified IC with different dimensions such as SC and HC
(Edvinsson and Malone, 1997;Christos, 2019;Chaudhuri et al., 2021;Majumdar et al., 2020;
Bhattacharjee et al., 2020;Chatterjee et al., 2021b); SC, employee capital and consumer capital
(Zerenler et al., 2008;Barrena-Mart
ınez et al., 2019;Chatterjee et al., 2021a); and social capital,
HC and organization capital (Reed et al., 2006;McDowell et al., 2018;Chatterjee et al., 2020).
Studies have revealed that most acceptable dimensions of IC consist of HC, SC and CC (Bontis,
1999;Zerenler et al., 2008;Sumedrea, 2013;Secundo et al., 2018;Vrontis et al., 2019;Glykeria,
2019). These three dimensions cover psychological, managerial and societal aspects of IC
(Chen et al., 2004;Chatterjee et al., 2021c).
JIC
23,1
104
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