What is the Most Critical Element of Intellectual Capital that Influences Business Performance?

Abstract

This research aims to analyze all elements of intellectual property that influence business outcomes. This empirical study employed a survey approach, utilizing structured questionnaires to gather primary data. A total of one hundred forty-five completed survey questionnaire forms were received. Six hypotheses were developed to meet the objectives of this study. The hypotheses suggested are evaluated utilizing Smart Partial Least Square (PLS) 4. The results confirm that three of the six hypotheses are substantiated. Specifically, human assets have emerged as a critical element of intellectual investment. The results indicate that human capital significantly contributes to both financial and non-financial dimensions of business success. However, within the financial framework, relational capital emerges as the most critical factor. The research findings provide a more profound comprehension of the effect of intellectual assets components on corporate success, explicitly focusing on manufacturing industries in the Riau Islands. This investigation is restricted to the economic conditions of the COVID-19 period in the Riau Islands, specifically to large and medium-sized enterprises in the manufacturing sector. Data were gathered through questionnaires that primarily employed subjective metrics. Additionally, the results may not be appropriate for other sectors. This research encourages the advancement of intellectual asset literature that emphasizes financial and other aspects of business performance in developing countries. Future research must examine the impact of intangible assets on business outcomes, transcending existing limitations. The present research elucidates the importance of intellectual capital and its implications for business achievement across financial and other aspects. This study assesses the extent and quantification of all three elements of intellectual assets, allowing professionals to formulate effective management strategies.