Innovation and firm performance: The moderating role of intellectual capital among Chinese companies

Ren, Chunya and Ting, Irene Wei Kiong and Kweh, Qian Long and Zhang, Cheng (2023) Innovation and firm performance: The moderating role of intellectual capital among Chinese companies. Asian Academy of Management Journal of Accounting and Finance, 19 (1). 155 -180. ISSN 1823-4992. (Published)

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Abstract

This study examines the impact of innovation on firm performance and how intellectual capital (IC) moderates the association between innovation and firm performance. We apply an innovation index that measures the frequency of innovative related words, which appear in firm financial reports to proxy for innovation. IC is estimated through the value-added IC (VAICTM) model. This study analyses Chinese firm-year observations of financial profitability (firm value) datasets, which total 19,152 (18,276) over the years from 2007 to 2019. Results indicate that the innovation index is positively related to financial profitability and firm market value. Moreover, the moderating outcomes suggest that IC boosts the positive relationship between innovation index and firm performance. Overall, this study highlights the importance of having innovation and IC together for gaining firm competitive advantages and progressing profitably. That is, firms should be innovative and must manage their IC well.

Item Type: Article
Additional Information: Indexed by Scopus
Uncontrolled Keywords: Financial profitability; Firm valuModerating effect; Innovation index; Intellectual capital
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
Faculty/Division: Faculty of Industrial Management
Institute of Postgraduate Studies
Depositing User: Mrs Norsaini Abdul Samat
Date Deposited: 17 Jul 2023 03:08
Last Modified: 17 Jul 2023 03:08
URI: http://umpir.ump.edu.my/id/eprint/38031
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