Unveiling the Nexus Between Intellectual Capital Efficiency and Financial Performance in Malaysia's Healthcare Sector Amidst the Covid-19 Crisis

Abstract

Intellectual capital is a vital element in strategic resources and enhances the productivity of companies in the knowledge-based economy. However, during the COVID-19 pandemic, most of the sectors in Malaysia are affected by staff and apply knowledge-based processes and procedures. The study aims to assess the influence of intellectual capital (IC) efficiency on financial performance in Malaysia's healthcare system during the COVID-19 pandemic. The VAIC technique was used in the study, as well as panel data analysis with STATA 14. The sample was drawn from three (3) years of healthcare annual reports, spanning 2019 to 2021. Eleven (11) healthcare companies were chosen because they have the capacity to develop public healthcare services and provide high-quality medical facilities. The findings for VAIC ranking show Hartalega, the main producer of disposable gloves marked as the highest ranking of efficiency and the least efficient is TMC Life. For panel data analysis, the results exhibit value-added human capital (VAHU) and value-added capital employed (VACA) are observed to have a significant and positive relationship with the dependent variable; Return on Equity (ROE). Human capital and capital employed are considered the most efficient resources to generate profit and the vital elements in the Malaysian healthcare sector to combat the COVID-19 pandemic. This study contributed to the body of knowledge in the Malaysian healthcare sector about intellectual capital literature. Malaysian healthcare organizations can benefit from incorporating more intellectual capital into their operations to preserve long-term development progress.