A study of the effect of intellectual capital on business performance

As time changes and progresses, the traditional bases of business assets in the form of finance and physical assets gradually decline. On the contrary, core competency, knowledge, and professional workers take place and become the principal structural form of assets. In business the invisible intellectual capital is an important reference indicator for the evaluation of business value. Intellectual capital is composed of human capital, structural capital, and relational capital. It is the summation of business knowledge, information, intellectual property, experience and skill, and holds critical position on the quality of business performance. This study explores from the viewpoint of intellectual capital its effect on business performance. The first stage of the study involves interview of the upper level managers in Taiwan public and private organizations in order to understand briefly the general condition of intellectual capital management. The second stage is an extensive questionnaire survey of the top one thousand businesses as to testify the research hypotheses. The contribution of this survey is to be elucidated in three parts: firstly, the factor analysis of the three dimensions of intellectual capital; secondly, the path analysis of the entire research model; and thirdly, the degree of correlation of various dimensions. Lastly suggestions on the practice of intellectual capital are discussed.