Swipe to navigate through the chapters of this book
The purpose of this study is to empirically measure the impact of intellectual capital performance on the traditional financial performance measures of selected Indian Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO) companies. Data of 13 prominent Indian BPO/KPO companies listed on Bombay Stock Exchange is taken for study. The selected companies of BPO/KPO sector are heavily reliant on intellectual capital. Financial data of nine years i.e. from 2007 to 2015 is collected from financial database CMIE’s Prowess. Literature available on intellectual capital and efficiency measurement is thoroughly reviewed. Value Added Intellectual Coefficient (VAIC™) method is used to measure the value based intellectual capital performance of the selected companies. The financial performance variables used in the study are return on assets, return on equity and operating income ratio for profitability and asset turnover ratio for productivity. VAIC™ and its components are calculated i.e. efficiency of capital employed and efficiency of intellectual capital. Empirical analysis is conducted using models of panel data i.e. fixed and random to analyse the impact of VAIC™ components on financial performance measures. Findings from the analysis suggest that intellectual capital efficiency has a significant impact on profitability but not on productivity. While capital employed efficiency has a significant impact on profitability and productivity both.
Please log in to get access to this content
To get access to this content you need the following product:
Arun, S. (2015, December 28). IT sector worried; India to take up visa fee with U.S. The Hindu.
Chen, M. C., Cheng S. J., & Hwang, Y. (2005). An empirical investigation of the relationship between intellectual capital and firms’ market value and financial performance. Journal of Intellectual Capital, 6(2), 159–176.
Drucker, P. F. (1988). The coming of the new organization. Harvard Business Review, 66(1), 45–53.
Drucker, P. F. (1993). Postcapitalist Society. Herper Collins Publishers. New York
Edvinsson, L. (1997). Developing intellectual capital at Skandia. Long Range Planning, 30(3), 320–373. CrossRef
Edvinsson, L., & Malone, M. S. (1997). Intellectual capital: The proven way to establish your company’s real value by measuring its hidden brainpower. London: Piatkus Books.
Firer, S., & Stainbank, L. (2003). Testing the relationship between intellectual capital and a company’s performance: Evidence from South Africa. Meditari Accountancy Research, 11(1), 25–44. CrossRef
Gan, K., & Saleh, Z. (2008). Intellectual capital and corporate performance of technology-intensive companies: Malaysia evidence. Asian Journal of Business and Accounting, 1(1), 113–130. doi: 10.1108/14691930010324188.
Hsu, G. H. Y. (2001). Knowledge-based economies and competition policy: Developmental strategy concerning the liberalization and internationalization of Taiwan’s business. Fair Trade Quaterly, 4(9), 123–136.
Itami, H. (1991). Mobilizing invisible assets. Massachusetts: Harvard University Press.
Janosevic, S., Dzenopoljac, V., & Bontis, N. (2013). Intellectual capital and financial performance in Serbia. Knowledge and Process Management. 20(1), 1–11.
Joshi, M., Ubha, D. S., & Sidhu, J. (2012). Intellectual capital disclosures by Indian and Australian information technology companies. Journal of Intellectual Capital, 13(4), 582–598. doi: 10.1108/14691931211276142.
Kamath, G. B. (2008). Intellectual capital and corporate performance in Indian pharmaceutical industry. Journal of Intellectual Capital, 9(4), 684–704. doi: 10.1108/14691930810913221.
Kianto, A., Ritala, P., Inkinen H., & Vanhala, M. (2013). The interaction of intellectual capital stocks and knowledge management practices in organizational value creation, Paper presented at 8th International Forum on Knowledge Asset Dynamics Zagreb.
Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard—Measures that drive performance. Harvard Business Review, 70(1), 71–79.
Kavida, V., & Sivakumar, N. (2010). The Relevance of Intellectual Capital in the Indian Information Technology Industry. The IUP Journal of Knowledge Management, 8(4).
Malik, M., & Velan, N. (2016). Trends and determinants of IT-BPM exports in India. Journal of Science and Technology Policy Management, 7(2).
Mehri, M., Umar, M., Saeidi, P., Hekmat, R., & Naslmosavi, S. (2013). Intellectual Capital and Firm Performance of High Intangible Intensive Industries: Malaysia Evidence. Asian Social Science, 9(9).
Marquardt, M. J. (1999). Action Learning in Action: Transforming Problems and People for World-class Organizational Learning. Palo Alto: Davies-Black Publishing.
NASSCOM. (2015). The IT-BPM sector in India. New Delhi: Strategic Review.
OECD. (1999). Measuring and reporting intellectual capital: experience, issues and prospects; an international symposium. Organisation for Economic Co-operation and Development, Amsterdam.
Patibandla, M., & Petersen, B. (2002). Role of transnational corporations in the evolution of a high-tech industry: The case of India’s software industry. World Development, 30(9), 1561–1577. CrossRef
Pulic, A. (2004). Intellectual capital—Does it create or destroy value? Measuring Business Excellence, 8(1), 62–68. CrossRef
Pulic, A. (1998). Measuring the performance of intellectual potential in knowledge economy. Presented at the 2nd McMaster World Congress on Measuring and Managing Intellectual Capital by the Austrian Team for Intellectual Potential.
Roos, G., & Roos, J. (1997). Measuring your company’s intellectual performance. Long Range Planning, 30(3), 413–426. CrossRef
Stewart, T. (1997). Intellectual capital: The new wealth of organizations. New York, NY: Doubleday.
Stewart, T. A. (2001) The Wealth of Knowledge: Intellectual Capital and the Twenty-first Century Organization, Currency, New York.
Sveiby, K. (1997). The intangible assets monitor. Journal of Human Resource Costing & Accounting, 2(1), 73–97. CrossRef
Sveiby, K.-E. (2008). East and West do meet—That is the real issue! Journal of Intellectual Capital, 9(2). doi: 10.1108/jic.2008.25009baf.001.
Tandon, K., Purohit, H., & Tandon, D. (2016) Measuring Intellectual Capital and Its Impact on Financial Performance: Empirical Evidence from CNX Nifty Companies. Global Business Review, 17(4), 980–997.
- Intellectual Capital and Financial Performance: Evidences from Indian Business Process Outsourcing Industry
Mohd Anas Raushan
Ahmed Musa Khan
- Springer Singapore
- Sequence number
Neuer Inhalt/© Stellmach, Neuer Inhalt/© Maturus, Pluta Logo/© Pluta, Frankfurt School