Impact of Intellectual Capital on Financial Results of Russian Companies

There are two main directions in the field of intellectual capital research – development of the methods of intellectual capital approximation and analysis of relationship between intellectual capital and results of companies’ performance. This research appeals to the second direction, representing analysis of intellectual capital and financial results of Russian companies. Intellectual capital is approximated by means of VAIC model, proposed by Pulic (2000), which incorporates the distinction between two components of intellectual capital – human capital and structural capital. We propose an improvement of the model, according to which the remuneration of boards of directors and top management as a “proxy” for human capital. This improvement is meaningful because all qualifications and knowledge which are essential for making strategic decisions are concentrated in top management of a company. The sample consists of 73 Russian companies, which are included in Broad market index of Moscow exchange, the data was gathered during the period from 2010 till 2014. The relationship between intellectual capital and return on assets (a “proxy” for financial result of a company) is analyzed by means of regression model with random effects using GLS method. In the course of valuation of this model we receive two main results of this research. Firstly, intellectual capital of Russian companies has a significant positive impact on their financial results. Secondly, human capital is the most important component of intellectual capital in the process of its influence on companies’ financial results. These conclusions stay in line with the previous research in this field of study. The opportunities for future research include proposing a direct “proxy” for structural capital, shift to MVAIC model, proposed by Nimtrakoon (2015) and also extension of a sample by means of less large Russian companies.