Exploring the intellectual capital dimensions impacting on firm performance: the case of Malaysia

This paper empirically investigates the intellectual capital dimensions impacting on firm performance in Malaysia. Utilising Pulic’s (2000, 2004) VAIC model, we apply this to data of 156 publicly listed companies on the Malaysian Stock Exchange in order to analyse the relationship between components of intellectual capital namely human capital efficiency, structural capital efficiency and capital employed efficiency and firm performance indicators of earnings per share and return on assets. Empirical results show that human capital efficiency and capital employed efficiency are positively associated with firm performance. Structural capital efficiency was found not to impact on firm performance. We argue that human capital efficiency and capital employed efficiency are important sources of firm organisational wealth, and thus should be taken into serious consideration when formulating firm strategy. We find that there is a need to identify the elements that influence structural capital efficiency in order to find out how it can influence the development and transformation of intellectual capital for improving firm performance of publicly listed companies in Malaysia