The Effect of Intellectual Capital on Financial Performance in the Context of Airline Companies

he contemporary developments in information technologies and the globalization have inevitably forced companies to compete on a global scale. The increasingly more competitive business environment has led to the emergence of a new factor of production called intellectual capital. Intellectual capital refers to the use of information, knowledge, intellectual property and experience in order to create wealth. By its very nature, intellectual capital refers to different processes and different outcomes in different sectors. The current study aims to investigate intellectual capital in the specific context of airline companies which are both technology-intensive and customer satisfaction-oriented organizations. In this framework, a set of financial indicators of a selected 23 airline companies are analyzed based on the Value Added Intellectual Capital Coefficient (VAIC) method. Panel data analysis findings reveal that there is a significantly positive correlation between intellectual capital components and operational profit, return-on-assets, and return-on-equity