Intellectual Capital and Value Creation-Is Innovation Capital a Missing Link?

William S Chang, Jasper J Hsieh


The purpose of the research is to examine the role of innovation capital in the creation of value for business
organizations. Taking an intellectual capital (IC) perspective, the paper considers R&D investment and its
impacts on the companies’ operating, financial, and market performance. To investigate the different components
of intellectual capital using financial measures, a modified Value Added Intellectual Coefficient (VAICTM) is
used for analysis. Empirical study is conducted on 367 Taiwan semiconductor companies using Pearson
correlation and linear multiple regression whereas financial information is generated from a third party database
from Taiwan Economic Journal. The result shows that a company’s IC in general has a negative impact on its
financial and market performance. However, the association between innovation capital which captured by R&D
expenditure efficiency (RDE) and companies’ operating, financial and market performance is significant. The
results provide a different perspective apart from extant research.

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International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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