Determinants of Intellectual Capital Performance: Empirical Evidence from Hotels in Mauritius

Abstract

The purpose of this paper is to empirically analyse the main determinants of intellectual capital performance in a dynamic setting of 43 Mauritian hotels over the period 2007 to 2018 by employing a dynamic panel vector error correction model (PVECM) which simultaneously allows for endogeneity and causality issues amongst the variables used. The results show that efficiency, profitability, size as well as human resource intensity positively and significantly influence the intellectual capital performance of Mauritian companies in the long run. On the other hand, barriers to entry and leverage negatively impact on the performance of intellectual capital.  This analysis is practically useful to the management of organizations as it provides them with useful information regarding which variables managers should focused upon if they intend to improve the intellectual capital efficiency of the organizations. The paper brings additional evidences from the case of an emerging economy. More importantly, it analyses the determinants of IC efficiency using dynamic panel data framework and takes into account the possible endogenous and indirect relationships which may exist in the hypothesized link.