IMPACT OF INTELLECTUAL CAPITAL ON CORPORATE FINANCIAL PERFORMANCE: AN EMPIRICAL EVIDENCE FROM PHARMACEUTICAL SECTOR OF PAKISTAN
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Keywords

Intellectual capital
VAIC
Partial least square
Financial performance
Pharmaceutical firms

How to Cite

Qadar, A. ., Makki, M. A. M. ., & Hussain, M. A. . (2015). IMPACT OF INTELLECTUAL CAPITAL ON CORPORATE FINANCIAL PERFORMANCE: AN EMPIRICAL EVIDENCE FROM PHARMACEUTICAL SECTOR OF PAKISTAN. Journal of Social Sciences and Humanities, 54(2), 91–109. https://doi.org/10.46568/jssh.v54i2.122

Abstract

The basic purpose of this study is to analyze the impact of intellectual capital on corporate
financial performance. This study is conducted on pharmaceutical sector listed in Pakistan Stock
Exchange. Data for this study was collected from audited annual financial statements of selected
business organizations over period of ten year i.e. from 2005-2014. Value Added Intellectual
Coefficient (VAIC) methodology is employed, in order to measure IC (Intellectual Capital) and its different components. The firm’s financial performance is measured by using profitability measures including ROE (Return on Equity) and ROA (Return on Assets), market to book value and asset turnover. In order to analyze the collected data, the Partial Least Square (PLS), a SEM (structural equation modeling) technique. These approaches are used to assess the measurement and structural models. The results of analysis have supported the proposed hypothesis i.e. there is
significant positive impact of intellectual capital on firm’s financial performance among pharmaceutical industries of Pakistan.

https://doi.org/10.46568/jssh.v54i2.122
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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Copyright (c) 2015 Amber Qadar, Dr. Muhammad Abdul MajidMakki, Dr. Muhammad Athar Hussain

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