The Nexus between Intellectual Capital and Value of the Firms: A Study on BSE S&P IT Firms in India

Journal of Critical Reviews, 6(5), 2019

1 Pages Posted: 30 Sep 2020

See all articles by Thanikachalam Vadivel

Thanikachalam Vadivel

Bharathidasan University - Department of Commerce and Financial Studies

Murugesan Selvam

Department of Commerce and Financial Studies, Bharathidasan University

Prof.Dr.Geetha Subramaniam

SEGI University

Balasundram Maniam

Sam Houston State University

Date Written: December 19, 2019

Abstract

Purpose: This paper examines the nexus between Intellectual Capital and Value of Information Technology Firms in the Indian Information Technology Industry. Forty-five companies, listed on BSE S&P IT Sector, were taken as a sample, for the purpose of this study.

Methodology: Value Added Intellectual Co-efficient (VAIC) method, as developed by Pulic (1998) and Granger Causality, was used for the evaluation of intellectual capital and its relationship with the value of sample companies.

Findings: The result of the study supports the hypothesis that the value of firms could be explained by the intellectual capital. It is found that there was significant association between intellectual capital and the value of sample firms.

Practical Implication: The corporate are to be suggested to concentrate more on human capital efficiency. Besides, the Government officials, policy makers and other stake holders are advised to urge the corporate disclosure practices.

Keywords: Intellectual Capital, IT Sector, Value of Firms, Value Added Intellectual Co- Efficient (VAIC)

JEL Classification: 034, E24, J24, G32

Suggested Citation

Vadivel, Thanikachalam and Selvam, Murugesan and Subramaniam, Geetha and Maniam, Balasundram, The Nexus between Intellectual Capital and Value of the Firms: A Study on BSE S&P IT Firms in India (December 19, 2019). Journal of Critical Reviews, 6(5), 2019, Available at SSRN: https://ssrn.com/abstract=3673715

Thanikachalam Vadivel (Contact Author)

Bharathidasan University - Department of Commerce and Financial Studies ( email )

Tiruchirappalli, Tamil Nadu 620024
India

Murugesan Selvam

Department of Commerce and Financial Studies, Bharathidasan University ( email )

Tiruchirappalli
Tamil Nadu
India

Geetha Subramaniam

SEGI University ( email )

9 Jalan Teknologi
Petaling Jaya, 47810
Malaysia
0123191363 (Phone)

Balasundram Maniam

Sam Houston State University ( email )

1803 Ave I
Huntsville, TX 77341
United States

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