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MINISTRY OF EDUCATION AND TRAININGHO CHI MINH CITY OPEN UNIVERSITY

TRAN PHU NGOC

INTELLECTUAL CAPITAL AND ITS EFFECTS ON THEPERFORMANCE OF FIRMS, SECTORS AND NATIONS

DOCTORAL DISSERTATION IN BUSINESS ADMINISTRATION

HO CHI MINH CITY – 2024

MINISTRY OF EDUCATION AND TRAININGHO CHI MINH CITY OPEN UNIVERSITY

TRAN PHU NGOC

INTELLECTUAL CAPITAL AND ITS EFFECTS ON THEPERFORMANCE OF FIRMS, SECTORS AND NATIONS

DOCTORAL DISSERTATION IN BUSINESS ADMINISTRATION

1 Dr Vo Hong Duc

2 Dr Van Thi Hong Loan

HO CHI MINH CITY – 2024

I, Tran Phu Ngoc, declare that the PhD thesis entitled Intellectual Capital and Its

Effects on The Performance of Firms, Sectors and Nations is entirely original and has

not been submitted for any other degree or diploma at any university or institution Tothe best of my knowledge, this thesis does not include any material that has beenpreviously submitted, either in full or in part, for any academic degree or diploma.Unless otherwise stated, this work is solely my own, conducted under the primarysupervision of Dr Vo Hong Duc and Dr Van Thi Hong Loan.

Ho Chi Minh city, July , 2024

Tran Phu Ngoc

This thesis would not have been possible without the support of my principalsupervisor, Dr Vo Hong Duc I am profoundly grateful to Dr Duc for his dedication,invaluable guidance, scholarly support, and generous commitment of time throughoutthis process Without his assistance, this thesis would not have come to fruition.

I also wish to express my gratitude to Dr Van Thi Hong Loan for her insightfulcomments and for inspiring me to complete this work.

Special thanks go to my friends at The CBER – Research Centre in Business,Economics & Resources at Ho Chi Minh City Open University, Ho Minh Chi, andTran Pham Khanh Toan, whose encouragement and support were instrumental incompleting this thesis.

I could not have completed this journey without the love and encouragement ofmy family and friends I am deeply appreciative of my late father, who believed in mypotential, and my mother, who is always proud of my achievements.

Lastly, I extend my heartfelt thanks to my wife, Huyen Co, for her patience andsupport in making this dream a reality.

I dedicate this thesis to my beloved daughter, Kha Han, whose inspiration andcourage helped me overcome all hardships throughout this journey.

In a knowledge-based economy, firms put great effort into remainingcompetitive Various economic sectors have also adopted strategies to demonstrateresilience in a competitive environment Nations are no exception In the era ofeconomic integration, countries have to utilize all available resources to achievesustainable national performance and development While tangible assets are limitedand their use is at the limit, the role of intangible assets has become important.Intellectual capital, considered a critical asset, refers to the intangible assetscontributing to value creation for firms, sectors, and nations Intellectual capitalincludes three distinct components: human, structural, and relational The importantrole of intellectual capital in driving performance is crucial Accumulating and usingintellectual capital efficiently provide significant effects and implications for thesuccess of firms, sectors, and nations.

Previous research has focused on understanding the role of intellectual capital at afirm level However, there is no well-established and generally agreed-upon approachfor measuring intellectual capital at a sector or national level As such, this dissertationaims to achieve two objectives The first objective is to measure intellectual capital atthree levels: firm, sector, and nation The second objective is to examine the impact ofintellectual capital on the firm performance, sectors' performance, and the country'sgrowth The findings from this dissertation are crucial for policymakers, practitioners,and executives to consider the roles of intellectual capital to maximize the benefits ofthis important asset.

Specific tasks from the first research objective – measuring intellectual capital –can be summarized as follows First, data are manually collected from the annualreports of 150 firms listed in Vietnam from 2011 to 2018 These firms are classifiedinto two categories: financial firms and non-financial firms This dissertationsubsequently uses the modified value-added intellectual coefficient (MVAIC) methodto compare the differences regarding the intellectual capital level between financialand non-financial firms in Vietnam Second, a new sectoral intellectual capital index is

developed to measure the intellectual capital level across 12 sectors in Vietnam from2011 to 2018.

The main results from this dissertation can be summarized as follows First, a

significant difference in intellectual capital level between financial and non-financialfirms in Vietnam The empirical results indicate that intellectual capital positivelyaffects firm performance in Vietnam These findings imply that non-financial firmswill need to invest in building their intellectual capital to increase their competitive

advantage Second, intellectual capital at the sector's level has been found to improve

the performance of sectors in Vietnam over the last decade, especially during theCOVID-19 pandemic, which has put sectors under severe pressure These findingshighlight the need for improving intellectual capital efficiency at the sectoral level to

remain competitive and prepare for future adverse events Third, the intellectual capital

level varies significantly across countries and Vietnam, from the current standingregarding intellectual capital ranking compared with other countries, has a significanttask to improve intellectual capital for the nation Finally, the empirical results confirmthat intellectual capital at the national level supports GDP per capita – an indicator of acountry's economic performance.

The contributions of this dissertation to the existing literature on intellectual

capital, its measurement and its effects on performance are threefold First, the study

examines the differences in intellectual capital level between the financial and financial in Vietnam and the impact of intellectual capital on firm performance Thefindings provide valuable managerial implications for practitioners and firm

executives.

Second, this dissertation pioneers the development of indices for measuring

intellectual capital for sectors and nations These indices can be used to examine the

effects of intellectual capital on different managerial and economic issues Third, to

the best of the author's knowledge, this dissertation is the first to measure intellectualcapital for firms, sectors, and nations in Vietnam and consider its effects onperformance in the Vietnamese context in the same place.

TABLES OF CONTENTS viii

LIST OF ACRONYMS xii

LIST OF FIGURES xiii

1.6 Research subject and scope 12

1.7 Contributions of the study 12

1.8 Research framework and steps 13

1.9 The outline of the dissertation 17

1.10 Summary 18

CHAPTER 2 LITERATURE REVIEW 19

2.1 Definitions and classifications 19

2.1.1 Saint-Onge’s model 20

2.1.2 Sveiby’s model 22

2.1.3 Skandia intellectual capital value scheme 23

2.3.5 Value Added Intellectual Coefficient™ (VAIC™) 34

2.4 Measuring intellectual capital: extended analysis for sectors and

2.4.1 Sectoral intellectual capital measurements 37

2.4.2 National intellectual capital measurements 40

2.5 Measuring performance of firm, sector and nation 46

2.5.1 Firm performance 47

2.5.2 Financial performance for sector 47

2.5.3 Performance of the nation 48

2.6 The effects of intellectual capital on performance of firms, sectors and

nations 50

2.6.1 Intellectual capital and firm’s performance 50

2.6.2 Intellectual capital and sector performance 55

2.6.3 Intellectual capital and national performance 57

2.7 Summary 60

CHAPTER 3 METHODOLOGY 61

3.1 Data 61

3.2 Research methods 63

3.2.1 Assess the impact of intellectual capital on firm performance 63

3.2.2 Assess the impact of intellectual capital on the performance of sectorand nation 66

3.3 Variables: definitions and measurements 72

3.3.1 Measuring intellectual capital at firm level 72

3.3.2 Sectoral intellectual capital index 74

3.3.3 New index of national intellectual capital 74

3.3.4 Other variables 79

3.4 Summary 80

CHAPTER 4 MEASURING INTELLECTUAL CAPITAL: THE ANALYTICALANALYSIS 81

4.1 An intellectual capital level for Vietnamese listed firms 81

4.2 An intellectual capital across sectors in Vietnam 83

4.3 Measuring national intellectual capital: a tale of two indices 86

4.4 A national intellectual capital across nations 88

4.4.1 National intellectual capital by region 88

4.4.2 National intellectual capital by income 90

4.5 Summary 96

CHAPTER 5 EMPIRICAL RESULTS ON THE EFFECTS OF INTELLECTUALCAPITAL ON PERFORMANCE OF FIRM, SECTOR AND NATION 99

5.1 Intellectual capital and firm performance 99

5.1.1 Correlation analysis 99

5.1.2 Autocorrelation and heteroskedasticity tests 102

5.1.3 The effects of intellectual capital on firm’s performance using paneldata estimation: generalized method of moments (GMM) 102

5.2 Intellectual capital and financial performance across sectors 105

5.2.1 The descriptive statistics 105

5.2.2 The cross-sectional dependence test 107

5.2.3 The slope homogeneity test 107

5.2.4 The panel unit root test 107

5.2.5 The panel cointegration test 108

5.2.6 The effects of intellectual capital on financial performance acrosssectors using Dynamic common correlated effects technique 108

5.2.7 The causality relationship flows between sectoral intellectual capital,sector performance and other variables 109

5.3 Intellectual capital and national performance 111

5.3.1 The cross-sectional dependence test 113

5.3.2 The slope homogeneity test 113

5.3.3 The panel unit root test 113

5.3.4 The panel cointegration test 113

5.3.5 The effects of national intellectual capital on national performanceusing the dynamic common correlated effects 114

5.3.6 The causality relationship flows between national intellectual capital,national performance and other macroeconomic variables 115

5.4 Summary 118

CHAPTER 6 CONCLUSIONS AND IMPLICATIONS 120

6.1 Research findings 120

6.1.1 Measuring intellectual capital 120

6.1.2 The effects of intellectual capital on the performance of firm, sectorand nation 122

6.2 Contributions and implications 124

6.2.1 Measuring intellectual capital 124

6.2.2 The effects of intellectual capital on the performance of firm, sectorand nation 128

6.3 Limitations and suggestions for future research 131

LIST OF ACRONYMS

INIC Index of national intellectual capital

LEV The ratio between total debt and total assets of firmsMVAIC Modified value-added intellectual coefficient

SIZE The natural logarithm of the total assets

LIST OF FIGURES

Figure 1.1 Real GDP growth trends: Vietnam, ASEAN, and the World 2

Figure 1.2 Infrastructure spending, GDP growth rate, and business environmentfactors 3

Figure 1.3 Global competitiveness and technological readiness ranking 3

Figure 1.4 Research process 13

Figure 1.5 Research framework 16

Figure 2.1 Saint-Onge’s model 21

Figure 2.2 Sveiby’s model 23

Figure 2.3 Skandia intellectual capital value scheme 24

Figure 2.4 Sullivan’s approach to visualize intellectual capital 25

Figure 2.5 The balanced scorecard 31

Figure 2.6 Brooking’s intellectual capital measurement model 32

Figure 2.7 Intangible assets monitor example 33

Figure 2.8 Skandia navigator 34

Figure 2.9 The DuPont model 47

Figure 3.1 Number of listed firms 62

Figure 4.1 Sectoral intellectual capital index in 2011-2018 period 85

Figure 4.2 An index of national intellectual capital: Lin, Edvinsson, Chen andBeding (2014) index versus the INIC 87

Figure 4.3 National intellectual capital across years by region 89

Figure 4.4 National intellectual capital across years by income 91

Figure 4.5 Accumulation of national intellectual capital across years in somecountries 92

Figure 4.6 Accumulation of national intellectual capital across years in Group ofSeven 93

Figure 4.7 Accumulation of national intellectual capital across years in Top 10 93

Figure 4.8 The accumulation of national intellectual capital for the Asia-Pacificcountries for almost two decades, from 2000 to 2018 95

Figure 4.9 National intellectual capital around the globe 96

Figure 5.1 The causality relationship flows between sectoral intellectual capital,sector performance and other variables 111 Figure 5.2 The causality relationship flows between national intellectual capital,

national performance and other macroeconomic variables 117

LIST OF TABLES

Table 2.1 Summary - Sectoral intellectual capital measurements 39

Table 2.2 Summary - National intellectual capital (NIC) measurements 45

Table 2.3 Summary - Intellectual capital and firm performance 54

Table 2.4 Summary - Intellectual capital and sector performance 56

Table 2.5 Summary - Intellectual capital and national performance 59

Table 3.1 Three components, and their proxies, of the new index of nationalintellectual capital (INIC) 79

Table 4.1 Descriptive statistics of the full sample 82

Table 4.2 Descriptive statistics for financial firms and non-financial firms 83

Table 4.3 National intellectual capital by region 89

Table 4.4 National intellectual capital by income 90

Table 5.1 Regression models 99

Table 5.2 The pairwise correlation coefficients and the variance inflation factor(VIF) among variables 101

Table 5.3 Empirical results using GMM estimations 104

Table 5.4 Regression models 105

Table 5.5 Descriptive statistics 106

Table 5.6 Correlation matrix and the variance inflation factor among variables

Table 5.9 Measurements of variables and data sources 112

Table 5.10 Empirical results - The effects of national intellectual capital on

nationalperformance 114

Table 5.11 The causality relationship flows between national intellectual capital,national performance and other macroeconomic variables 116

LIST OF PUBLISHED PAPERS

1 Vo, D H., & Tran, N P (2024) Does national intellectual capital matter for

economic growth in the Asia–Pacific economies? Journal of Intellectual

Capital, 25(2/3), 253-274.

2 Vo, D H., & Tran, N P (2024) Sectoral Intellectual Capital and Sector

Performance in an Emerging Market Montenegrin Journal of Economics,

20(2), 209-220.

3 Vo, D.H., Van, L.T.-H., Hoang, H.T.-T., & Tran N.P (2023) Theinterrelationship between intellectual capital, corporate governance and

corporate social responsibility Social Responsibility Journal, 19(6), 1023-1036.

4 Vo, D.H., & Tran, N.P (2023) Measuring national intellectual capital and its

effect on country’s competitiveness Competitiveness Review, 33(4), 820-839.

5 Tran, N.P., & Vo, D.H (2022) Do banks accumulate a higher level of

intellectual capital? Evidence from an emerging market Journal of Intellectual

Performance? Knowledge and Process Management, 29(4), 333-342.

8 Vo, D.H., & Tran, N.P (2021) Measuring national intellectual capital: a novel

approach Journal of Intellectual Capital, 23(4), 799-815.

9 Vo, D.H., & Tran, N.P (2021) Intellectual capital and bank performance in

Vietnam Managerial Finance, 47(8), 1094-1106.

10 Tran, N.P., Van, L.T.-H., & Vo, D.H (2020) The nexus between corporate

governance and intellectual capital in Vietnam Journal of Asia Business

Studies, 14(5), 637-650.

CHAPTER 1INTRODUCTION

This chapter presents and discusses the background and rationales for conductingthis study and its novelty concerning intellectual capital measurement and the effectsof intellectual capital on the performance of firms, sectors and nations.

1.1 Introduction

In the context of the knowledge-based economy, firms enhance their competitiveadvantage by shifting from tangible assets into intangible assets (Stewart, 1997;Sveiby, 1997) Castro et al (2019) consider that intellectual capital plays a major rolein the knowledge-based economy and is the key driver of firm’s sustained competitiveadvantages Intellectual capital is defined as unique skills, knowledge, and solutionsthat can be converted into value in the market, leading to an increase in firm’scompetitiveness, productivity, and market value (Pulic and Kolakovic, 2003).

The role of intellectual capital in firm’s performance is increasing, so it isnecessary to examine the dynamics of this role and the contributions of intellectualcapital to firm’s performance Inkinen (2015) demonstrates that firms can benefit froma variety of intellectual capital profiles This means that some businesses require highlevels of overall intellectual capital to achieve impressive performance, while otherscan still achieve positive results with relatively low structural or relational capital Inaddition, the impact of intellectual capital on a firm performance primarily stems fromits combinations, interactions and mediating effects Furthermore, there is substantialproof highlighting the important connection between intellectual capital and a firm'sinnovation performance (Song, 2022; Inkinen, 2015) Various studies have beenconducted to examine the effects of intellectual capital on firm’s performance with afocus on financial firms (Haris et al., 2019; Firer and Williams, 2003) andmanufacturing firms (Xu and Wang, 2019) Xu and Li (2019) find a difference inintellectual capital efficiency between high-tech and non-high-tech small and medium-size firms in China The impacts of intellectual capital on firm’s performance in theemerging markets in the Asian region has been examined in previous studies(Indonesia, Soetanto and Liem, 2019; Thailand, Tran and Vo, 2018; Malaysia, Goh,

2005) In particular, Soetanto and

1 Singapore is not included because of differences in population size, income, infrastructure and technologylevels.

Liem (2019) argue that intellectual capital affects the market-to-book value of theknowledge-based sectors, which have intensively used technology and/or humancapital In a study on Thailand’s banking sector, Tran and Vo (2018) conclude thatbank profitability is driven mainly by the efficiency of capital employed Goh (2005)asserts that banks have accumulated a lower level of structural capital efficiency thanhuman capital efficiency.

Since joining the Association of Southeast Asian Nations (ASEAN), Vietnamhas emerged as a country with remarkable national performance and development Inrecent years, leaders in the miracle of national performance among ASEAN membershave been emerging markets, such as Vietnam (OECD, 2018) Figure 1.1 indicates thatthe pattern of real growth in the gross domestic product (GDP) in Vietnam is stableand higher than that of other emerging countries, such as Indonesia, Malaysia, thePhilippines, and Thailand Since 2000, Vietnam's GDP per capita has grown by 6.4percent annually—one of the fastest rates in the world (Trieu, 2019) In addition,Vietnam has closely integrated into the regional and world economy, with strong tradecommitments, such as the European-Vietnam Free Trade Agreement, theComprehensive and Progressive Agreement for Trans-Pacific Partnership, theVietnam- Eurasian Economic Union Free Trade Agreement, and the ASEAN–HongKong, China Free Trade Agreement, to name a few.

ASEAN 5: Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.Figure 1.1 Real GDP growth trends: Vietnam, ASEAN, and the World1

WorldASEAN 5

Vietnam10.0%

2 Singapore is not included because of differences in population size, income, infrastructure and technologylevels.

In addition, as shown in Figure 1.2, Vietnam has increased its investment ininfrastructure to bridge the gap with other ASEAN member countries Vietnam’sspending on infrastructure represents the second fastest among the ASEAN members,11.5 percent, which is almost doubled the rate of GDP growth for the period 2012-2016 However, the business environment in Vietnam is still maturing The gaps in theinstitutional quality undermine investors’ confidence Figure 1.2 also indicates thatsatisfaction with the investment environment is still lower in Vietnam than in otheremerging markets in Asia.

Figure 1.2 Infrastructure spending, GDP growth rate, and business environment factors2

Moreover, based on the 2017-2018 global competitiveness index, Vietnam laggedbehind that of other ASEAN members, such as Malaysia, Indonesia, and Thailand.Vietnam has a competitive advantage from its relatively low labor costs However, itslow technology readiness (in the technology readiness ranking, as presented in Figure1.3) poses a disadvantage for Vietnam in technological innovation and automation.

Country Global Competitiveness Index,institutions pillar ranking,2017-2018

Economist Intelligence Unittechnological readiness ranking, 2018-

Source: PwC (2018); Economist Intelligence Unit (2018).

Figure 1.3 Global competitiveness and technological readiness ranking

On the above observations, The Vietnamese firms are facing great opportunitiesand challenges For example, the ongoing Covid-19 pandemic worldwide puts firms ina new state, a new environment The Vietnamese firms have faced new challenges thathave never occurred in the past Therefore, The Vietnamese firms need to be flexiblein their production plans, business strategies and images and branding The diversifiedknowledge-based economy plays an important role in all areas of life and society andgradually replaces the industrial economy, which only focuses on production andconsumption In order to meet the important requirements of the knowledge-basedeconomy, firms need to thoroughly utilize the value from intellectual capital – animportant intangible asset The development of the knowledge-based economyenhances the role of intellectual capital in businesses and society and pushes it to anew level This practice requires firms to use and implement appropriate and flexiblepolicies to utilize the value of resources, which are considered intangible, from firmsincluding skills, knowledge, innovation, and relationship with customers.

1.2 Research problems

Edvinsson and Malone (1997) consider that intellectual capital includes two maincategories: human capital and structural capital Pulic (1998) introduces a value-addedintellectual coefficient (VAIC) model to measure intellectual capital efficiency Thismodel separates intellectual capital into three components, including (i) human capital,(ii) structural capital and (iii) capital employed Other studies such as Nimtrakoon(2015); Vishnu and Gupta (2014); and Nazari and Herremans (2007) also propose amodified value-added intellectual coefficient (MVAIC) model The MVAIC modelhas been widely used in measuring intellectual capital efficiency at firms’ level(Bayraktaroglu et al., 2019; Xu and Wang, 2019; Chen et al., 2015).

In addition, the strategy of spreading knowledge of firms is not only forthemselves, but also extends to the sector, region and country (Pedro et al., 2018).Medina et al (2007) argue that policymakers can identify solutions to enhance theintangible resources of the sector or region through the analysis of their intellectualcapital in order to achieve a sustainable growth Marcin (2013) presents countriesaround the world are increasingly interested in measuring intellectual capital acrosssectors As such, it is important and necessary to develop a new sectoral

intellectual capital in

accordance with the sectors’ development theories (Pedro et al., 2018) Doing so willpromote the management of intangible resources in sectors However, a methodologyto measure and evaluate the efficiency of the sectoral intellectual capital has beenlargely ignored in previous studies.

Moreover, at the national level, no widely used or highly recognized methodshave been used to measure intellectual capital across nations A limited number ofstudies (Lin, 2018; Kapyla et al., 2012; Lin and Edvinsson, 2011; Schneider, 2007;Andriessen and Stam, 2005; and Bontis, 2004) with the focus on measuring nationalintellectual capital have been conducted However, the measurements of nationalintellectual capital adopted in those studies are very impractical to be widelyimplemented across nations due to the unavailability of required data and/or anexcessive usage of judgements Lin and Edvinsson (2011) paper is a pioneering studyin measuring intellectual capital across countries This method is impractical to beimplemented for other nations outside the intended samples As such, differentapproaches in measuring intellectual capital across sectors, particularly across nations,are expected to properly measure intellectual capital across sectors and nations forcomparison purposes (Salonius and Lonnqvist, 2012).

In the past three decades, the financial sector has played a crucial role inVietnam's national performance and development In the context of deepening anintegration of the Vietnamese economy into the world economy, the financial sectorshould effectively utilize both tangible and intangible resources, especially intellectualcapital The operations of financial firms are directly related to intellectual capitalbecause they are knowledge-based companies (Buallay et al., 2020) In addition, Firerand Williams (2003) emphasize that financial firms have higher intellectual capitalefficiency than other sectors Employees of financial firms exhibit a higherhomogeneity of skills and knowledge (Kubo and Saka, 2002) Financial firmsoperating in a highly regulated environment tend to be more compliant in meetingregulatory expectations while non- financial firms are not As such, these differencesresult in a different level of intellectual capital across sectors.

To the best of my knowledge, contributions of intellectual capital to firm’sperformance with a focus on the differences between financial and non-financial firms

have largely been ignored in previous studies, particularly in emerging markets such as

Vietnam As such, a study directly targeting an emerging market like Vietnam offerscrucial implications for the intellectual capital community including firms’ executives,academics and policymakers This study examines the differences in intellectualcapital efficiency between financial and non-financial firms in Vietnam and thecontribution of intellectual capital to firm’s performance This dissertation extends theexisting literature by developing a new sectoral intellectual capital index (SICI) whichcan be used to measure a different level of intellectual capital across sectors Thisstudy uniquely and strikingly extends the current literature concerning intellectualcapital measurement by developing a new index of national intellectual capital (INIC)which is hardly seen in previous studies In addition, the effects of intellectual capitalon the performance of firms, sectors and nations are investigated.

performance In addition, corporate social responsibility plays a fully

mediate role in the relationship between corporate governance and sustainabilityperformance in UK firms Soetanto and Liem (2019) state that capital employedefficiency and structural capital efficiency contribute to firm wealth In this paper,when the sample is divided into industries based on whether they are high-levelknowledge- based (those with the intensive use of technology and human capital) andlow-level- knowledge based, the results indicate that capital employed has a positiveeffect on firm performance in those that are high-level-knowledge based.

My literature review indicates that the contributions of intellectual capital to firmperformance with a focus on the financial and non-financial sectors have largelyoverlooked in Vietnam The financial sector plays the role of providing financialservices to people and businesses This segment includes banks, securities, financial,real estate and insurance firms The main players in Vietnam's financial sector beingbanks and financial institutions (Zhang et al., 2021) The financial firm plays animportant role in national performance in Vietnam by facilitating financialtransactions In addition, the value of the assets in the banking system is nearly twicethat of its GDP (Trieu, 2019) The banking system in Vietnam plays a leading role inVietnam's national performance, so the focus on banking becomes important in thisstudy Buallay et al (2020) consider banks knowledge-intensive firms The mostimportant financial firm assets are in the form of intellectual capital A financial firm’sactivities are mainly related to intellectual capital, such as brand building and humanresources Financial firm employees exhibit greater homogeneity than employees inother sectors (Kubo and Saka, 2002) Moreover, it has been argued that banking hasaccumulated higher levels of intellectual capital than other sectors (Firer and Williams,2003) The current literature considers that staff identity is important becauseintellectual capital is one of the key measures for assessing the competence ofemployees In addition, financial firms operating in a heavily regulated environment,whereas non-financial firms are not, resulting a different levels of intellectual capitalefficiency However, to the best of my knowledge, the impact of intellectual capital onthe performance of firm with a focus on the differences between financial and non-financial firms has been overlooked in intellectual capital literature, particularly inemerging markets such as Vietnam.

Ali et al (2022) argue that intellectual capital consists of three main components:

human capital, structural capital and relational capital Human capital contributes tofirm

performance through the competence and creativity of employees, allowing them toidentify, create new knowledge and solve problems (Xu and Li, 2019) Structuralcapital includes procedures and processes, human resource policies and guidelines forlabor management practices such as recruitment, task management, patents,intellectual property (Sardo and Serrasqueiro, 2017) Human capital utilizes structuralcapital to increase firm performance (Soetanto and Liem, 2019) Relational capitalencompasses the relationships with stakeholders that allow for certain behaviors andsustainable relationships (Tran and Vo, 2018) Relational capital facilitates accessing,processing, synthesizing, and exchanging knowledge within and across corporateinfluences on firm performance (Maali et al., 2021).

1.3.2 Sectoral intellectual capital and its effects to performance across sectors

Liu et al (2021) state that intellectual capital plays the important role ofintangible assets, it helps to exploit important knowledge that affects the innovationability of firms, sectors and regions Marcin (2013) emphasizes that intellectual capitalis a fundamental resource for value creation at the sectoral, regional and nationallevels.

In addition, from being one of the poorest countries in the world in the 1980s, Vietnam has achieved rapid national performance and sustainable developmentgoals in the last 10 years (Baum, 2020) These achievements of Vietnam are based onbroad- based economic reforms and national development strategies, focusing on fivemain sectors: education, health, roads, water and electricity infrastructure (Baum,2020) Nguyen and Gregar (2018) emphasize the role of knowledge management ininnovation of Vietnamese firms Besides, Nguyen et al (2021) also affirm thatintellectual capital has a positive influence on firm’s performance in Vietnam Dutt(1990) asserts that imbalance between sectors can slow down economic development.In particular, the coronavirus pandemic affects the economies of countries around theworld in a "K- shaped recovery" The characteristic of this type of recovery is thatsome sectors will improve, while others will continue to decline (Nikkei, 2021).Hence, it is necessary to measure and evaluate the efficiency of intellectual capitalacross sectors in Vietnam and other emerging markets.

mid-Previous studies have measured intellectual capital in the firm level (Phusavat et

al., 2011; Hoang et al., 2020b) and national level (Lin and Edvinsson, 2011; Bontis,

2004) In addition, measuring intellectual capital at the regional level has also beenconsidered in previous studies, such as regional level in France (Edvinsson andBounfour, 2004); 29 provinces and cities of China (Xia and Niu, 2010); 8 Russianfederal districts (Markhaichuk and Zhuckovskaya, 2019) Besides, various regionalintellectual capital measurements have been introduced, such as intellectual capitaldynamic value (Edvinsson and Bounfour, 2004), principal components analysis andcluster analysis (Xia and Niu, 2010); data envelopment analysis (Nitkiewicz et al.,2014); multiple-criteria decision-making (Liu et al., 2021).

However, the issue of measuring intellectual capital at the sector level has beenlargely ignored in previous studies Based on the modified value-added coefficient(MVAIC) model, this study proposes a sectoral intellectual capital index (SICI) byexamining the intellectual capital efficiency of each firm in the sector In addition, theauthor uses total assets as a weight to construct the intellectual capital index of thesector Moreover, this dissertation examines the impact of intellectual capital on sectorperformance in Vietnam.

1.3.3 National intellectual capital and its effects to national performance

The Asia-Pacific region is considered the fastest-growing region globally,contributing two-thirds of the global growth The region includes China and Japan,two of the world's three largest economies (Business Insider, 2020) In addition, theregion is also home to some of the fastest-growing countries in the world, such asVietnam (World Bank, 2020a) The S&P (2020) report stresses that the Covid-19"shadowed" the economic prospects of the Asia Pacific region, leading to shocks indomestic supply and demand in Japan and South Korea, as well as weakening thedemand from external markets such as the US and Europe Based on the report,economies in the region are suffering the double effect of weakening demand and asupply reduction Countries in the Asia Pacific region are gradually changing newproduction methods and new customer approaches The role of intangible assets, suchas automated manufacturing technologies and online sales services, has graduallyasserted the importance of creating and maintaining a competitive advantage Inparticular, Stahle et al (2015) state that conducting more detailed analyzes of the roleof national intellectual capital in different economies would also add value to

intellectual capital literature.

Classifying intellectual capital into three distinct levels — firm, sector, and nation— ensures a comprehensive and multidimensional approach to research (Svarc et al.,2021) Rather than solely focusing on intellectual capital at the enterprise level, thisdissertation delves deeper into measuring intellectual capital across all three levels togain a nuanced understanding of its significance and impact on performance Thisclassification and measurement framework offers flexibility and applicability acrossvarious contexts, allowing for tailored research and theoretical methods at each level,ranging from the specific context of individual firm to the broader scope of sector andnation.

By examining intellectual capital management strategies and measures at thefirm, sector, and nation levels, this dissertation aims to provide specific and practicalrecommendations for businesses and policymakers This approach enables theidentification of trends and challenges in intellectual capital management anddevelopment at each level, facilitating a deeper understanding of potential issues andopportunities for businesses and the economy as a whole Ultimately, this dissertationcontributes to informed decision-making and policy formulation by shedding light onthe dynamics of intellectual capital across different levels of analysis.

Understanding the impact of national intellectual capital on national performanceis essential for businesses to navigate the complexities of the global businessenvironment effectively (Lin, 2018) Research into national intellectual capital yieldsvaluable insights that can inform strategic management decisions and guide businessactions in an increasingly competitive landscape The findings of this dissertation candirectly inform business management and development practices, providing actionableintelligence for administrators and governments to formulate policies aimed atoptimizing the utilization of intangible assets, particularly intellectual capital.

As the knowledge economy continues to evolve, research on national intellectualcapital occupies a crucial position within the realm of modern business administrationand economics (Svarc et al., 2021) This dissertation not only informs current businesspractices but also shapes future trends and forecasts in firm strategy development andcorporate governance By shedding light on the dynamics of intellectual capital, thisdissertation field contributes to a deeper understanding of the factors driving national

performance and innovation, thereby facilitating informed decision-making at both organizational and governmental levels.

1.4 Research objectives

1.4.1 The main objective

This study has the overarching objective of measuring intellectual capital at thefirm, sector and nation levels In addition, this dissertation also examines the impactsof intellectual capital on the performance of firms and sectors; and on nationalperformance, which is effectively the economic performance of the countries.

1.4.2 Specific objectives

The objectives of this study are summarized as follows:

1) To measure intellectual capital for firms, sectors and nations.

Specifically, I use the modified value-added intellectual coefficient(MVAIC) model to measure intellectual capital of financial and non-financialfirms in Vietnam I also examine the difference in intellectual capital of thesetwo groups of firms: financial versus non-financial firms Furthermore, Idevelop a new sectoral intellectual capital index (SICI) to measure theintellectual capital of 12 sectors in Vietnam In addition, I extend the existingliterature by developing a new index of national intellectual capital (INIC) tomeasure intellectual capital at the nation’s level I then use this newlydeveloped INIC index to measure a degree of intellectual capital for 104countries globally.

2) To examine the effects of intellectual capital on the performance of

firms, and sectors, and nations This dissertation employs a measured level

of intellectual capital at firms, sectors, and nations’ levels to investigate theeffects of intellectual capital on the performance of firms, sectors andnations Various econometric methods are utilized to ensure the validity androbustness of the findings when examining these effects Drawing on acomprehensive review of previous research, performance at the firm andsector levels is assessed using return on total assets and return on equitymetrics In addition, national performance is measured using GDP per capita.By employing these metrics and methodologies, this dissertation aims to

provide a thorough

2) What are the effects of intellectual capital on the performance of firms andsectors in Vietnam; and on performance of nations?

1.6 Research subject and scope

Measuring intellectual capital and the effects of intellectual capital on theperformance of firms, sectors and nations are the subjects of the dissertation.

For a research scope for firms and sectors, the research scope covers 150 listedfirms on the Vietnam’s stock market in the period 2011-2018 For the nations, thescope of the study covers 104 countries in the 2000-2018 period.

1.7 Contributions of the study

This study contributes to the existing literature on intellectual capital in thefollowing respects.

- First, this dissertation investigates the differences in intellectual capital

efficiency between the financial and non-financial sectors in Vietnam Theeffects of intellectual capital on firm’s performance in Vietnam are thenexamined Vietnam is an emerging market in the Southeast Asia, one of themost dynamic economies in the region and the world Managerialimplications are important for the intellectual capital community, includingacademics, policymakers, and practitioners This dissertation provides thebridge to fill the current gap.

- Second, this study extends the current literature by developing a new

measure of intellectual capital at the sector level - a new sectoralintellectual capital

index (SICI) The SICI can now be used to investigate various aspects of thesectors with intellectual capital efficiency in Vietnam.

- Third, a new index of the national intellectual capital (INIC), one of the first

of its kind, is developed to measure the different levels of intellectual capitalacross nations globally This new index includes the following fundamentalattributes: (i) simplicity - a new index should be simple to calculate; (ii)quantification – a new index should be easily quantifiable without usingjudgments; (iii) market relevance – a new index should be able to reflect theprevailing market and economy conditions; and (iv) internationalcomparison

– a new index should be practically implemented for comparison purposesacross countries regardless of the level of national performance anddevelopment.

1.8 Research framework and steps

Based on the theoretical foundations and empirical research conducted in relationto the field of study, the analytical framework is proposed Research data will becollected and analysis will be performed The research process is describedspecifically as follows:

Source: Author's synthetic

Conclusions and implicationsAnalyze and interpret data

Collect data

Review of the theoreticalfoundation and previous studies

Research problems