IMPACT OF INTELLECTUAL CAPITAL ON FIRM PERFORMANCE WITH REFERENCE TO NIFTY INFRA COMPANIES

Authors:

1. Jeffina Grace¹, P. G. Thirumagal²

¹ II MBA, School of Management Studies, Department of Management Studies, Vels Institute of Science Technology and Advanced Studies (VISTAS) Pallavaram.

² Professor MBA, School of Management Studies, Department of Management Studies, Vels Institute of Science Technology and Advanced Studies (VISTAS) Pallavaram.

Abstract - This study measures the role of intellectual capital (IC) on the financial performance of the 30 companies that fall under the NIFTY Infrastructure Index for the years 2021-2025. Concerning the measurement of performance IC (intellectual capital) is measured via the Value-Added Intellectual Coefficient (VAIC) model, and the Modified Value-Added Intellectual Coefficient (MVAIC) model. Concerning the measurement of performance IC is measured via Return on Assets (ROA), and Tobin’s Q, whereas data collected from 150 firm year observations is used as the source for the creation of the secondary financial data. For the purposes of this study, the author applied ANOVA, correlation, and multiple regression to evaluate and determine the results. IC is a variable that has a positive influence on the performance of the firm as determined by the firm's ROA performance, and of the factors that contribute to IC, the most significant of them is Human Capital Efficiency (HCE). In the case of IC, there is a lack of influence of the firm on the performance of Tobin Q market, as the size of the firm has a negative influence on Tobin Q. Tobin Q is the study and measurement of the market value of the firm that is a CFO value driven by belief. The study suggests that while the asset turnover and the proxy of profitability do improve, the financial leverage and the proxy of profitability do diminish. IC is one of the most important factors for the improvement of market value; in the space of infrastructure, more focus is required to improve the market value of the firm and to achieve the sustainable competitive advantage.

Key Words:  Intellectual Capital, VAIC, MVAIC, Firm Performance, ROA, Tobin’s Q, NIFTY Infrastructure Index, Human Capital.