Intellectual capital and financial performance of Serbian companies in the real sector

There is significant evidence that intellectual capital (IC) determines a company's potential for growth and generates the majority of its added value. Thus, research into measuring and analyzing IC and determining its impact on the financial and market performance of companies is gaining increasing interest. Different forms of IC such as knowledge, skills, talent, enthusiasm, patents, know-how, software, databases, close customer relations, brand, unique organizational design, and corporate culture can be categorized into human, structural, and relational capital. This paper explores the impact of IC, measured using the Value Added Intellectual Coefficient (VAICTM), on the financial performance of 100 Serbian companies in the real sector that achieved the highest net profits in 2010. We also analyze the impact of various individual IC components on financial performance. Scientific hypotheses are developed according to similar studies on IC and financial performance. Performance measures used in this research are net profit, operating revenues, operating profit, return on equity, and return on assets. Data is analyzed using statistical methods of correlation and regression (single and multiple). A simple regression model is used to indicate the relationship between VAIC, as an aggregate measure, and the financial performance of the selected companies, while multiple-regression models are employed to determine the relationship between individual components of VAIC and financial performance. Although the majority of similar studies so far show that IC has a significant impact on financial performance, this causality in the case of Serbian companies is small or irrelevant.