Firm Financial Performance and Intellectual Capital in R&D and Consultancy Services in Lower-Medium-Income Countries: The Case of Vietnam
Author(s)
Nguyen Thi Nguyet , Tan Lam Dinh , Tran Thi Huyen Trang ,
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Abstract
This research evaluates the impact of intellectual capital (IC) on firm financial performance in research, development, and consultancy services in a lower-medium-income country like Vietnam. Applying the value-added intellectual coefficient with the random and effect models for the period of 2005-2014, empirical results imply that IC contributes significantly to the firm financial performance. In which structural capital efficiency (SCE) has the highest impact and Capital Employed Efficiency (CEE) has the second one on firm performance. Impact of IC and its components depend on firm sizes. SCE has the strongest effect on firm financial performance for large-sized firms and CEE has the strongest effect for micro-sized firms. This research has some contributions as follows: i) the first examines impacts of IC and its components on ROA for firms in R&D and consultancy services with comparison among different firm sizes; ii) it shortens the research gap of IC impact for lower-medium-income countries; iii) data represents for whole economy and the studied time experienced significant reform in development of knowledge and service sector while limitations of most other research is single ownership and short study time; iv) it is associated with policy and management objectives because its results will give evidence to reform policies to reach national goals of increasing national income; v) it figures out which IC element has the strongest effect on these firms’ financial performance, resulting the corresponding recommendations to Vietnamese government and firm managers. The findings suggest Vietnamese government and firm managers which component of intellectual capital they should focus on investing corresponding to various firm sizes.
Keywords
Knowledge, Intellectual capital, VAIC, R&D, consultancy, services, firm performance, random effect, fixed effect, lower-medium-income countries.
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