Intellectual Capital in Information Technology Companies in India: An Impact Study on Firm Performance

Abstract

The purpose of this research is to study how intellectual capital impacts firm performance in information technology companies in India. Based on an extensive review of the existing literature, critical factors of intellectual capital (human capital, structural capital, and relational capital), and firm performance (financial performance and brand reputation) were defined to build a theoretical (causal) model. Senior executives of Indian IT companies (N=112) formed the sample for the empirical study. Using structural equation modeling, the study found human capital and structural capital impact brand reputation and financial performance. Interestingly, relational capital impacted financial performance and not brand reputation. The outcome of this research is significant in two ways: one, it explored the impact of intellectual capital on brand reputation and financial performance, which underpins research directions from the literature, and two, it contributed to the comparatively less-researched contextual relevance from an Indian information technology company perspective.