Moderating role of intellectual capital on capital structure and corporate performance of high technology industry in China and United States
As one of the knowledge-intensive industries in today's knowledge-based economy, the high technology industry is becoming increasingly competitive. How to improve corporate performance is a key concern for most companies. Since the Modigliani-Miller (MM) Theorem was proposed, research on the...
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| Format: | Thesis |
| Language: | English |
| Published: |
2023
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/114131/1/114131.pdf |
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| Summary: | As one of the knowledge-intensive industries in today's knowledge-based
economy, the high technology industry is becoming increasingly competitive.
How to improve corporate performance is a key concern for most companies.
Since the Modigliani-Miller (MM) Theorem was proposed, research on the
relationship between capital structure and corporate performance has been a
popular academic topic.
At the same time, intellectual capital is the core resource of knowledge
considered as one of the core capital forms of high-tech companies. Its
importance in creating value and maintaining long-term competitive advantage
for corporate becomes abundantly obvious. Therefore, it is of great practical
significance to explore the relationship between capital structure and corporate
performance of high-tech companies from the perspective of intellectual capital.
The research background is based on the US-China trade war. Since high-tech
industry is the most affected industry in this trade war, the sample is selected
from the top 200 listed companies in high-tech industry with the highest market
capitalization in two countries, totaling 400 companies. The balanced dataset
employed in the study covers a period from the year 2017 to 2019 and semiannuals
were used as a study period, so a total of six study periods. The data
analysis consisted of two stages. The first stage is to calculate firm efficiency as
a measure of corporate performance using the Data Envelopment Analysis
(DEA). The second analysis step is to use the static panel regression analysis
by Pooled Ordinary Least Square (POLS), Fixed Effect (FE), and Random Effect
(RE) models. Subsequently, the Generalized Method of Moments (GMM) is
adopted as a further robustness check test for the possibility of endogeneity in
the models.
The results of the study reveal a significant relationship between debt to asset
and long-term debt to equity as important measures of capital structure and
corporate performance. Furthermore, human capital efficiency and value added
intellectual coefficient can both have a positive and significant impact on
corporate performance. Moreover, the statistics indicate that intellectual capital
has a significant moderating effect between capital structure and corporate
performance.
The study concludes that the capital structure and intellectual capital have
significant impact on corporate performance. Furthermore, the study presents
evidence on the moderating role of intellectual capital on the link between capital
structure and corporate performance. The study contributes to the existing body
of knowledge, empirical and practice. Firstly, this comparative research
contributes in enlarging the existing literature on the relationship among capital
structure and corporate performance of the high-tech industry in the economic
context of the US-China trade war. Secondly, the using of Value Added
Intellectual Coefficient (VAIC) to measure intellectual capital establishes a
performance and intellectual capital evaluation index system that meets the
characteristics of this type of enterprise, further laying the foundation of a certain
knowledge system for the development of high-tech industry. Finally, the findings
suggest that high-tech company managers should pay more attention to
intellectual capital, so that intellectual capital can be employed efficiently and
effectively and that the impact of capital structure on the company can be
adjusted to better contribute to business operations. |
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