Do Intellectual Capital Elements Spur Firm Performance? Evidence from the Textile and Apparel Industry in China

This paper examines how investment in intellectual capital (IC) elements by textile and apparel companies improves firm performance measured in terms of profitability, market value, and productivity. The modified value-added intellectual coefficient (MVAIC) model is applied to measure IC. Using a pa...

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Published in:Mathematical problems in engineering 2021, Vol.2021, p.1-12
Main Authors: Zhang, Liang, Yu, Qi, Jin, Zhenji, Xu, Jian
Format: Article
Language:English
Subjects:
Business competition
Clothing industry
Competitive advantage
Coronaviruses
Efficiency
Financial performance
Human capital
Intellectual capital
Literature reviews
Manufacturers
Manufacturing
Market value
Mathematical problems
Pharmaceutical industry
Product life cycle
Productivity
Profitability
Profits
Return on assets
Software industry
Textiles
Value creation
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container_title Mathematical problems in engineering
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creator Zhang, Liang
Yu, Qi
Jin, Zhenji
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description This paper examines how investment in intellectual capital (IC) elements by textile and apparel companies improves firm performance measured in terms of profitability, market value, and productivity. The modified value-added intellectual coefficient (MVAIC) model is applied to measure IC. Using a panel of 35 Chinese textile and apparel companies for a six-year period (2013–2018), the results show that physical and human capitals are the strong factors that contribute to firm performance. In addition, relational capital negatively influences profitability and market value, and structural capital and innovation capital have a negative impact on employee productivity. We also find that the MVAIC model performs better in measuring IC than the original value-added intellectual coefficient (VAIC) model. This paper can provide some insights for corporate managers to enhance firm performance and gain competitive advantage by proper utilization of IC in traditional industries.
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subjects Business competition
Clothing industry
Competitive advantage
Coronaviruses
Efficiency
Financial performance
Human capital
Intellectual capital
Literature reviews
Manufacturers
Manufacturing
Market value
Mathematical problems
Pharmaceutical industry
Product life cycle
Productivity
Profitability
Profits
Return on assets
Software industry
Textiles
Value creation
title Do Intellectual Capital Elements Spur Firm Performance? Evidence from the Textile and Apparel Industry in China
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