INFLUENCE OF INTELLECTUAL CAPITAL ON COMPANY PERFORMANCE

Abstract

Insights into the intellectual capital (IC) on financial performance is relatively a modern phenomenon, attracts the interest of global researchers. Though famous in the banking and communication sectors, little evidence finds in Real Estate and the Consumer Service Sectors. This study focuses to assess the relationship between IC and financial performance (FP) of 46 Real Estate and Consumer Service PLCs listed in Colombo Stock Exchange, Sri Lanka, during 2015 - 2018. The Value-Added Intellectual Capital (VAIC) model with its three primary components is represented by secondary data from annual reports of companies on IC. The FP was represented by Return on Assets and Return on Equity. The findings indicated that VAIC has a positive relationship with FP of the above 46 PLCs, indicating that CEE and FP have a significant positive effect. Recommends, more investments in IC associated activities, ensuring better performance where moderate and weak relationships exist.