The Effect of Intellectual Capital on Corporate Performance in High-Technology SMEs

The paper aims to investigate the impact of Intellectual Capital (IC) on corporate performance in high-technology Italian Small and Medium-sized Enterprises (SMEs). The research question is the following: does intellectual capital affect corporate performance in high-technology SMEs? The Value Added Intellectual Coefficient (VAIC) has been employed to determine how human, structural and physical resources affect corporate performance and value creation. The research sample includes 2,442 enterprises operating in the high-technology sectors (Manufacture of basic pharmaceutical products and pharmaceutical preparations; Manufacture of computer, electronic and optical products; Manufacture of air and spacecraft and related machinery). The empirical analysis is relative to the period between 2012 and 2016. The findings show that the effect of both human capital efficiency and physical capital on operating profitability is positive, but the impact of physical capital is stronger. While the structural capital efficiency has a negative effect on corporate performance. The time variables negatively affect corporate performance, with an increasing coefficient in the five years. The main limitation derives from disadvantages of VAIC: it is based on historical data, it does not consider the synergy effects between tangible and intangible assets and the employee training; it does not include relational capital. The study tries to fill the gap in the IC literature by providing insights into the relationships between IC, SMEs and technology. The managerial/entrepreneurial implications are relevant; in fact, physical resources represent the principal lever of performance for managers in high-technology sectors. Human capital efficiency probably has a greater impact in the long period, scarcely significant in the medium term. Finally, the negative effect of structural capital could be caused by an inefficient use of this resource. Moreover, the employed variable could not be adequate to effectively measure this IC component. The interaction among IC components could better explain the impact on corporate performance.