Intellectual Capital and Business Performance of Pharmaceutical Firms in Kenya

Abstract

Intellectual capital is an investment in the organization and it is perceived to be a strategic resource and a source of competitive advantage. The purpose of this chapter is to test the relationship between intellectual capital and business performance of pharmaceutical firms in Kenya. The specific objectives are to determine whether human capital, structural capital and relational capital influence business performance of pharmaceutical firms in Kenya. The results indicate that human capital, structural capital and relational capital influence business performance of pharmaceutical firms in Kenya. Human capital and structural capital relationship strongly exist among the studied pharmaceutical firms and significantly influenced business performance positively. In addition, the study confirmed that human capital, structural capital and relational capital are dimensions of intellectual capital. The developed model confirm that the theory fitted data with fit indices above or below the required thresholds and the empirical results provided strong support for the model.