Impacts of Intellectual Capital on Profitability: An Analysis on Sector Variations in Hong Kong

Abstract

Efficiency appears to be more important for companies in finance sector. Structural Capital Efficiency demonstrates a very pronounced impact on companies in property sector. The results suggest that Pulic may have over simplified impacts of intellectual capital. Also, previous studies may have ignored sector variation in the impacts of intellectual capital. Future research is suggested to widen the research scope. The recommended future research areas are to study the ways to improve the management of intellectual capital; to study other factors that mostly affect the intellectual capital; and to study how the knowledge-based organizations benefited from the development of intellectual capital. Keywords: intellectual capital, profitability, knowledge-based economy, Hong Kong Stock Exchange ListedCompanies Aim: The purpose of this study is to examine the relationship between intellectual capital and profitability as well as its impacts on companies in different sectors of Hong Kong.Design/Methodology: Data are drawn from the companies included in the Hang Seng Composite Index, a commonly-used benchmark index for blue-chip stocks listed on Hong Kong Stock Exchange (HKSE).