Margarita R. Hudgins
The purpose of this study is to examine the relationship between intellectual capital and organizational performance. Intellectual capital is measured using Pulic’s VAIC™ model consisting of combined measures from human capital, structural capital, and capital employed, and firm performance is measured as return on assets. Data are drawn from 11 publicly traded U.S. property-casualty insurance companies trading on the NYSE. The findings of the analyses do not support a significant relationship between intellectual capital and performance. However, there was evidence to support a strong highly significant association between structural capital as one of the three individual components of VAIC™ and organizational performance. The regression results confirmed each of the models was a strong predictor of explaining the change in the performance of the organizations. This research will aid the property-casualty industry in using metrics to evaluate the optimal use of human capital in conjunction with economic resources to innovate and create greater value for the organization and its stakeholders.
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