Title: Intellectual capital and financial performance: evidence from Chinese retail firms

Authors: Huanzhe Chen; Md Jahidur Rahman

Addresses: School of Environment, Education and Development, The University of Manchester, UK ' College of Business and Public Management, Wenzhou-Kean University, China

Abstract: This study explores the impact of intellectual capital (IC) on Chinese retail public firms' financial performance. This study chooses Chinese retail industry quoted on the Shanghai and Shenzhen Stock Exchanges as the sample, covering the period from 2011 to 2020. Results show that IC (measured through the value-added intellectual coefficient) has a positive relationship with EBITDA, NPM, ROI, ROA, and ROE. From this study, several implications suggest that managers and investors wisely utilise IC in firm decision-making. This study provides proof that high investments in IC can improve the efficiency of value addition for firms or industries in China. Managers must understand that investment in IC is vital to sustainably improve the financial performance of their companies. Investors can use a group of indicators instead of merely one for each aspect of financial performance to analyse the role of IC and obtain more accurate instructions to make investment decisions.

Keywords: intellectual capital; financial performance; firm profitability; corporate return; value-added intellectual coefficient; VAIC; Chinese retail listed firms.

DOI: 10.1504/IJLIC.2023.132171

International Journal of Learning and Intellectual Capital, 2023 Vol.20 No.4, pp.394 - 409

Received: 09 Jan 2022
Accepted: 25 Oct 2022
Published online: 12 Jul 2023 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article