Intellectual Capital and Economic Value Added:A case study of Nafis Nakh Textile Company

The aim of this paper is to examine the impact of intellectual capital on the economic performance. To measure the intellectual capital, Value Added Intellectual Coefficient(VAIC) method, suggested by Pulic, has been used. VAIC measures the efficiency of three types of inputs: physical capital, human capital and structural capital. Economic Value Added (EVA) has also been used to measure the economic performance. For this purpose, Nafis Nakh, as a successful and growth textile company was chosen for investigation. The study analyses firm’s resources and capabilities in a fourteen-year period from 2004 to 2017 using annual time series data. Pearson Correlation Coefficient and Multiple Linear Regression Technique were used to test the hypotheses. The results revealed that there was a significant positive relationship between intellectual capital and economic performance. Furthermore, the results indicated that structural and human capital had significant positive effects on financial performance of companies. Finally, we found no evidence that physical capital had any significant effect on the organizational performance.

Keywords:

Nafis Nakh Textile Co , Intellectual Capital , Economic Value Added , Value Added Intellectual Coefficient , Physical Capital , Human Capital , Structural Capital