Significance of intellectual capital measurement: an investigation of the Bangladesh pharmaceutical industry

This paper aims to assess the most appropriate approach to measuring Bangladesh's pharmaceutical sector's intellectual capital efficiency and to determine whether intellectual capital components significantly affect pharmaceutical organisational performance using the value-added intellectual coefficient (VAIC), modified value-added intellectual coefficient (MVAIC), and adjusted value-added intellectual coefficient (AVAIC) models. Data from 2018 to 2022 from 20 pharmaceutical organisations enlisted in the Dhaka Stock Exchange was used. A fixed/random effect regression model through Stata 14 is applied to analyse the data. Additionally, the two-step system generalised method of moments (GMM) has been used to address endogeneity issues. It is observed that the AVAIC model is the most appropriate for calculating IC efficiency. Moreover, the results offer a more profound and new understanding of how IC components are associated with the performance of Bangladesh pharmaceuticals, however, the system GMM results suggest that these connections may not be as strong when endogeneity is considered.