Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

The Impact of Intellectual Capital on the Indian Real Estate Sector Profitability and Productivity


Affiliations
1 Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar, Haryana, India
     

   Subscribe/Renew Journal


To meet the global competition, the general concentration of Indian corporate is on physical and intellectual capital. The intellectual capital resources keep on changing the effect on the company's performance. The organisations that expect most recent change and rebuild their intangible resource base may increase additional competitive advantage in the economy. There is no doubt that booming companies across all industry sectors are utilising intellectual capital to gain economic advantage. The objective of this paper is to examine the IC and its components, known as human capital, structural capital, and customer capital, and their interrelationship with the performance of the Indian real estate sector to illuminate whether value created by tangible intensive firms can be evaluated better utilizing by IC for the time of 2005 to 2015. VAICTM developed by Ante Pulic (1998) is used as a methodology. Pearson Correlation and OLS regression are used to find relationships between variables that are explaining value creation activity. The finding of this study reveals that value added intellectual coefficient indicated a positive and significant association with the profitability of the Indian real estate sector.

Keywords

Intellectual Capital, Real Estate, Capital, Firms Value; JEL Codes: O34, R30, E22, G31.
Subscription Login to verify subscription
User
Notifications
Font Size


  • Ahangar, R. G. (2011). The relationship between intellectual capital and financial performance: An empirical investigation in an Iranian company. African Journal of Business Management, 5, 88-95.
  • Ahmadi, F., Habibi, F., & Khodamoradi, A. (2011). The role of intellectual capital on improvement performance of agricultural bank in Iran. Interdisciplinary Journal of Contemporary Research in Business, 3, 1116-1124.
  • Bellman, S. (2003). How to use PLS. Graduate School of Management, University of Western Australia, Crawley, July 2003.
  • Bontis, N. (1997). Intellectual capital questionnaire. Institute of Intellectual Capital Research Inc, Hamilton, Canada.
  • Bontis, N. (1999).Managing organizational knowledge by diagnosing intellectual capital: Framing and advancing the state of field. International Journal of Technology Management, 18, 433-462.
  • Bontis, N., Keow, W. C. C., & Richardson, S. (2000). Intellectual capital and business performance in Malaysian industries. Journal of Intellectual Capital, 1, 85-100.
  • Canibano, L., Garcia-Ayuso, M., & Sanchez, P. (2000). The value relevance and managerial implications of intangibles: A literature review. The Journal of Accounting Literature, 19,102-30.
  • Celenza, D., & Rossi, F. (2014). Intellectual capital and performance of listed companies: empirical evidence from Italy. Measuring Business Excellence, 18, 22-34.
  • Chen, M. C., Cheng, S. J., & Hwang, Y. (2005). An empirical investigation of the relationship between intellectual capital and firms’ market value and financial performance. Journal of Intellectual Capital, 6, 159-76.
  • Clarke, M., Seng, D., & Whiting, R. H. (2011). Intellectual capital and firm performance in Australia. Journal of Intellectual Capital, 12, 505-530.
  • Corrall, S. (1999). Knowledge management. ARIADNE- web magazine for professionals, Retrieved fromwww.ariadne.ac.uk/issue18/knowledge-mgt (accessed May 10, 2016).
  • Edvinsson, L., & Malone, M.S. (1997). Intellectual capital: Realizing your company’s true value by finding its hidden brainpower. Harper Business, New York.
  • Edvinsson, L., & Sullivan, P. (1996). Developing a model of managing intellectual capital. European Journal of Management, 14, 356-64.
  • French, N. (2004).The valuation of specialized property: A review of valuation methods. Journal of Property Investment & Finance, 22, 533-41.
  • Hermans, R., & Kauranen, I. (2005). Value creation potential of intellectual capital in biotechnology-empirical evidence from Finland. R&D Management, 35, 171-185.
  • IASB (2004). Intangible Assets IAS 38. International Accounting Standards Board. London, March 31, 2004.
  • IBEF (2013). Real estate industry in India. Retrieved fromwww.ibef.org/industry/realestate-india.aspx (accessed 20 November 2014).
  • IBEF (2016). Real estate industry in India. Available at: www.ibef.org/industry/realestate-
  • india.aspx (accessed 10 February 2016).
  • Kamath, G. B. (2008). Intellectual capital and corporate performance in Indian pharmaceutical industry. Journal of Intellectual Capital, 9, 684-704.
  • Kamukama, N. (2013). Intellectual capital: company’s invisible source of competitive advantage. Competitiveness Review: An International Business Journal, 23, 260-283.
  • Khani, A., Hosain, A., Ahmadi, F., & Homayouni, G. (2011). The impact of intellectual capital on performance of Iranian food firms. Interdisciplinary Journal of Contemporary Research in Business,2, 315-326.
  • Klein, D. A., & Prusak, L. (1994). Characterising intellectual capital. Centre for Business Innovation, Ernst & Young, working paper March, 1994.
  • Komnenic, B., & Pokrajcic, D. (2012). Intellectual capital and corporate performance of MNCs in Serbia. Journal of Intellectual Capital, 13, 106-119.
  • Laing, G., Dunn, J., & Huges-Lucas, S. (2010). Applying the VAIC model to Australian hotels. Journal of Intellectual Capital, 11, 269-283.
  • Maditinos, D., Chatzoudes, D., Tsairidis, C., & Theriou, G. (2011). The impact of intellectual capital on firms’ market value and financial performance. Journal of Intellectual Capital, 12, 132-151.
  • Mehralian, G., Rajabzadeh, A., Sadeh, M. R., & Rasekh, H.R. (2012). Intellectual capital and corporate performance in Iranian pharmaceutical industry. Journal of Intellectual Capital, 13, 138-158.
  • Mondal, A. O., & Ghosh, S. K. (2012). Intellectual Capital and financial performance of Indian Banks. Journal of Intellectual Capital, 13, 515-530.
  • Morariu, C. M. (2014). Intellectual capital performance in the case of Romanian Public companies. Journal of Intellectual Capital, 15, 392-410.
  • Muhammad, N. M. N.,& Ismail, M. K. A. (2009). Intellectual capital efficiency and firm’s performance: A study on Malaysian financial sectors. International Journal of Economics and Finance, 1, 206-212.
  • Murale, V., Jayaraj, R., & Ashrafali, A. (2010). Impact of intellectual capital on firm performance: A resource based view using VAIC approach. International Journal of Business Management, Economics and Information Technology, 2, 283-292.
  • Nazari, J., & Herremans, I. (2007). Extended VAIC model: Measuring intellectual capital components. Journal of Intellectual Capital, 8, 595-609.
  • Ong, T. S., Yeoh, L. Y., & Teh, B.H. (2011). Intellectual capital efficiency in Malaysian foodand beverage industry. International Journal of Business and Behavioral Sciences,1, 16-31.
  • Pal, K., & Soriya, S. (2012). IC performance of Indian pharmaceutical and textile industry. Journal of Intellectual Capital, 13, 120-137.
  • Petty, R., & Guthrie, J. (2000). Intellectual capital literature review: Measurement, reporting and Management. Journal of Intellectual Capital, 1, 155-176.
  • Pulic, A. (1998). Measuring the performance of intellectual potential in knowledge economy. Retrieved fromwww.measuring-ip.at
  • Pulic, A. (2004). Intellectual capital- does it create or destroy value? Measuring Business Excellence, 8, 62-68.
  • Roos, J., & Roos, G. (1997). Measuring your company’s intellectual performance. Long Range Planning, 30,325.
  • Roos, J., Roos, G., Edvinsson, L., & Dragonetti, N. C. (1997). Intellectual Capital - Navigating the New Business Landscape. Macmillan Press, London, 59-77.
  • Sa´nchez, M. P., Chaminade, C., & Olea, M. (2000). Management of intangibles: An attempt to build a theory. Journal of Intellectual Capital, 1, 312-28.
  • Sharabati, A. A., Jawad, S. N., & Bontis, N. (2010). Intellectual capital and business performance in the pharmaceutical sector of Jordan. Management Decision, 48, 105-31.
  • Seleim, A., & Khalil, O. (2011). Understanding the knowledge management-intellectual capital relationship: A two-way analysis. Journal of Intellectual Capital, 12, 586-614.
  • Stewart, T. A. (1998). Intellectual capital - The new wealth of organizations(pp. 25-36). Nicolas brealey publishing, London, 25-36.
  • Tan, H. P., Plowman, D., & Hancock, P. (2007). Intellectual capital and financial returns of
  • Companies. Journal of Intellectual Capital, 8, 76-95.
  • Ting, I. W. K., & Lean, H. H. (2009). Intellectual capital performance of financial institutions in Malaysia. Journal of Intellectual Capital, 10, 588-599.
  • Vishnu, S., & Gupta, V.K.(2014). Intellectual capital and performance of pharmaceutical firms in India. Journal of Intellectual Capital, 15, 83-99.
  • Zeghal, D., & Maaloul, A. (2010). Analysing value added as an indicator of intellectual capital and its consequences on company performance. Journal of Intellectual Capital, 11, 39-60.

Abstract Views: 243

PDF Views: 0




  • The Impact of Intellectual Capital on the Indian Real Estate Sector Profitability and Productivity

Abstract Views: 243  |  PDF Views: 0

Authors

Karam Pal Narwal
Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar, Haryana, India
Nisha Yadav
Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar, Haryana, India

Abstract


To meet the global competition, the general concentration of Indian corporate is on physical and intellectual capital. The intellectual capital resources keep on changing the effect on the company's performance. The organisations that expect most recent change and rebuild their intangible resource base may increase additional competitive advantage in the economy. There is no doubt that booming companies across all industry sectors are utilising intellectual capital to gain economic advantage. The objective of this paper is to examine the IC and its components, known as human capital, structural capital, and customer capital, and their interrelationship with the performance of the Indian real estate sector to illuminate whether value created by tangible intensive firms can be evaluated better utilizing by IC for the time of 2005 to 2015. VAICTM developed by Ante Pulic (1998) is used as a methodology. Pearson Correlation and OLS regression are used to find relationships between variables that are explaining value creation activity. The finding of this study reveals that value added intellectual coefficient indicated a positive and significant association with the profitability of the Indian real estate sector.

Keywords


Intellectual Capital, Real Estate, Capital, Firms Value; JEL Codes: O34, R30, E22, G31.

References