Exploring the Nonlinear Effect of Intellectual Capital on Financial Performance: Evidence from Listed Shipping Companies in China

Abstract

Intellectual capital (IC) is reckoned as a significant driving force of competitive advantage and financial sustainability of any organization. The study’s objective is to explore the nonlinear effect of IC and its components on financial performance (FP) of China’s listed shipping companies over a six-year period (2014–2019). The modified Value Added Intellectual Coefficient (MVAIC) model is used to systematically assess IC. The empirical results show an inverted U-shaped relationship between the aggregate IC and FP (measured through return on assets). Regarding IC components, human, relational, and innovation capitals have an inverted U-shaped relationship with FP, while the quadratic relationship between structural capital and FP is not significant. In addition, physical capital has a U-shaped relationship with FP. This study will offer some new insights for corporate managers to improve firms’ FP by effectively utilizing their IC resources.

Is Too Much a Good Thing? The Non-Linear Relationship Between Intellectual Capital and Financial Competitiveness in the Chinese Automotive Industry

“…Car production relies greatly on sophisticated equipment and automated production processes, but overinvesting in physical assets tends to consume a large amount of money. In addition, Xu and Zhang (2021) reported a U-shaped association between physical capital and ROA of shipping companies in China. According to Model (6), the coefficient of HCE is 5.814, the coefficient of HCE 2 is -1.585, and the coefficient of HCE 3 is 0.135.…”

“…The coefficients of SCE, SCE 2 , and SCE 3 are statistically insignificant, thereby confirming that SC is not a major determinant of FC. Similarly, Asif et al (2020) and Xu and Zhang (2021) claimed that there is no non-linear relationship between SCE and firm performance. However, under Industry 4.0, digital transformation can boost production efficiency, reduce costs, and generate greater collaboration with the help of new robotics, artificial intelligence, and the Internet in the global automotive industry (Llopis-Albert et al, 2021).…”

The Effect of Green Intellectual Capital on Green Performance in the Spanish Wine Industry: A Structural Equation Modeling Approach

“…If a company develops a strong GHC, employees will have the necessary green knowledge to address environmental challenges. In fact, in the environmental management literature, a qualified GHC is considered to increase the organization's chances of gaining a sustainable advantage over time, since a more environmentally aware workforce will have better skills to address such organizational challenges and, therefore, contribute to a greater extent to the generation of sustained performance over time [62,63].…”

The Influence Mechanism of Knowledge Heterogeneity of Venture Capital Syndication on Innovation Performance of Entrepreneurial Firms: Evidence from China

“…According to the classification in the literature, IC is generally considered to consist of human capital (HC), structural capital (SC), and relational capital (RC) [28,29]. Human capital is defined as the sum of all the knowledge, skills, abilities, expertise, and experience of individuals in an institution that can be used to accomplish firm objectives [30,31]. Structural capital (SC) refers to the knowledge that would remain at the firm after employees have left, and it mainly involves the "nonhuman stocks of codified knowledge in an organization" [32,33].…”