Intellectual Capital and Firm Financial Performance in ASEAN: The Role of Dynamic Capability

Abstract

This study seeks to explore the relation between intellectual capital, dynamic capability and firm performance within an emerging market environment, ASEAN. In order to evaluate the moderating role of dynamic capability in the link between intellectual capital and performance, we examine first the effect of intellectual capital and dynamic capability consisting of research and development and marketing capability on firm performance. A sample of ASEAN countries (Indonesia, Malaysia, the Philippines and Singapore) non-financial companies during 2018-2020, is utilized for Panel data regression model’s study. A total of 327 observations constitutes the final sample used in this study. The results demonstrated a positive impact of IC on the performance of companies. This result showed that intellectual capital may provide companies with greater financial success. The relation between dynamic capability, which is research and development capability and marketing capability towards performance is also positive. Meanwhile, the positive relation between intellectual capital and corporate financial performance may be moderated by dynamic capabilities, which are research and development capabilities, as well as marketing capabilities. This conclusion suggests the use and maintenance of intellectual capital by companies together with their dynamic capabilities, research and development and marketing capabilities.