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Abstract
Intellectual Capital is an important for running a business successfully. Intellectual Capital is the key for creating and sustaining competitive edge over other businesses. Today the companies need to invest in Intellectual Capital to stand for the gain. Thus, this paper seeks to analyze the relationship between intellectual capital and corporate financial performance of Indian software companies for a period of eleven years from 2001 to 2011. Annual reports, especially the profit and loss accounts and balance sheets of the selected companies for the relevant years have been used to obtain the data. The sample of 51 software companies has been selected from Business Standard (BS) 1000 on the basis of net sales. The Value Added Intellectual CoefficientTM (VAIC) method developed by Public, 1999 is applied for measuring the value based performance of the companies. Data have been analyzed by using Panel Regression. The intellectual capital (human capital and structural capital) and physical capital of the selected companies have been analyzed and their impact on corporate performance has been measured. Results indicate that profitability and intellectual capital are positively associated. However, Physical capital has been found to be the most significant factor affecting the performance of the firms.