The effect of intellectual capital on financial performance in BIST technology index listed firms

There exists a vast literature on the possible relationship between intellectual capital and financial performance. However, it is seen that most studies on the subject focus on service industry. Studies on technology sector seems to be scarce and related literature mostly deals with sub-sectors. This study aims to fulfill this gap and focuses on determination of intellectual capital and on the relationship between intellectual capital and financial performance of technology sector. Throughout this purpose, it is aimed to make an econometric analysis on the relationship between intellectual capital and financial performance on a data set of Borsa Istanbul (BIST) technology sector. Empirical findings indicate that both in the short- and long-run, intellectual capital affects financial performance negatively. This finding is contrary to theoretical background and expectations. The other independent variable, i.e., intangible assets have statistically significant and positive in the short-run. This finding fits for theoretical background and expectations. However, after one period lag, the coefficient between intangible assets and financial performance turns negative.