Intellectual capital as a key driver of firms’ performance in the age of globalization: case of Croatia

¹ University of Split, University Department of Forensic Sciences, R. Boskovica 33, 21000 Split, Croatia
² University of Split, University Department of Professional Studies, Kopilica 5, 21000 Split, Croatia

^* Corresponding author: tpkramaric@unist.hr

Abstract

Research background: Intellectual capital (IC) is given an increasing importance in the context of companies’ activities in the knowledge – oriented economy and is thought to be a key factor of competitiveness and financial performance enhancement in modern globalized world. Many methods have been introduced over time to measure IC with value added intellectual capital (VAIC) proposed by Pulic (1998) playing an important role.

Purpose of the article: The aim of this paper is to investigate the relationship between the intellectual capital and its components, specifically, human capital, capital employed and structural efficiency on corporate performance of Croatian companies listed on Zagreb Stock Exchange (ZSE) in the period 2016 – 2020.

Methods: The performance is expressed with profitability, specifically ROA, and market valuation, i.e. Tobin’s Q while the value added intellectual capital (VAIC) is used to measure IC as well as its components. A set of control variables comprising of firm size, leverage and age is also covered in the research while static panel analysis is performed to identify variables that might contribute to firm performance.

Findings & Value added: The statistically significant and positive influence of VAIC and its components indicate that an enhancement in the efficiency of firms’ resources and employees’ knowledge leads to creation of new economic value.