The interrelationship between intellectual capital and firm performance: evidence from China's manufacturing sector.

Purpose: The purpose of this paper is to examine the impact of intellectual capital (IC) and its components (human, structural and relational capitals) on the performance of manufacturing listed companies in China. This paper also investigates the impacts of company ownership, industry attributes and region on the IC-performance relationship. Design/methodology/approach: The study uses the data of 953 manufacturing companies listed on the Shanghai and Shenzhen Stock Exchanges over the period 2012–2016. The modified value-added intellectual coefficient (MVAIC) model is applied to measure IC efficiency. Finally, multiple regression analysis is employed to test the research hypotheses. Findings: This study reveals that IC can enhance firm performance in China's manufacturing sector. Overall, earnings are affected by physical capital, human capital (HC) and structural capital (SC), and profitability and productivity are influenced by physical capital, HC, SC and relational capital. Physical capital is the most influential contributor to firm performance. In addition, state-owned enterprises have a greater impact of IC on firm performance than private-owned enterprises; high-tech manufacturing companies have higher IC performance than non-high-tech manufacturing companies; manufacturing companies in China's eastern region have higher IC performance than the counterparts in central and western regions. Practical implications: The findings may help managers, stakeholders and policymakers in developing countries to effectively and efficiently manage their IC resources. Originality/value: This is the first study to evaluate IC and its relationship with firm performance among Chinese manufacturing listed companies using the MVAIC model. [ABSTRACT FROM AUTHOR]