A Study Of The Influence Of Intellectual Capital On Firm Growth

Economic growth has been the long-range goal of the human society. Firm growth has become the main problem facing enterprises . Firms must grasp the nature of the industry and understand the growth mechanism .How to survive in the hard competition and maintain rapid growth has become the problem concerned by many sectors such as government, banks and firms .The growth of software firms is not only the growth of one industry ,but also a great positive external effect on other sectors. Information technology, following the steam engine era and the electricity era ,has been the 3^rd greatest technology revolution in the history. The development of software industry bring the prosperous and rapid progress of other sectors such as telecommunications, finance, aerospace, education and even national defense. Because of the late start of our nation's software industry , how to survive when facing other west software giants is a problem faced not only by software industry, but by our nations prosperity.In the era of knowledge-based economy, intellectual capital has replaced the traditional production factors as the strategically important source of competitive advantage. Because of its' highly knowledge-based characteristic, the competitive advantage comes from the capabilty of management knowledge and service which has been called the Intellectual Capital. Here we refer the intellectual capital as knowledge, experience, organizational technology and expertise skills which can bring the competitive advantage.It is essential to research the intellectual capital (IC) of software firms, it is not only the key importance to software industry. At the same time , highly effective software R&D can improve the efficiency of other sectors ,which has a great significance to promote the development of national strength.In this dissertation, the chapter is structured as follows:Chapter 1: Introduction. The main purpose of the research, the significance of the study, the innovation and the structure of this dissertation.Chapter 2: Literature review. It reviews the literature about firm growth theory, the intellectual capital management, summarize it as the theory base of this dissertation.Charpter 3: The introduction about the Intellectual Capital management in Chinese software firms and the affection on firm growth, which makes for the theoretical basis for the model in next charpter.Chapter 4: Research model. The research framework are built based on the literature and cases, It is the core part of this dissertation. Then introduce the questionnaire design and measure variable and data processing method. The main affection hypersthesis is from basic IC to core IC and then to growth.Chapter 5: Data processing : This chapter deals with how to porcess variables, the validity and reliability is tested by Amos structure equitation model and SPSS statistic software, and test the the hypothesis.Chapter 6: The result of the research, Discuss the research contributions and shortcomings and tell the further research direction. The research contents of this dissertation.This research combine the empirical study. The empirical survey consists of 285 questionnaires which was sent to software firms and 161 was received, of which 149 ware valid and effective . with effective recovery rate of 52.28%. After validity and reliability analysis, we use SPSS and Amos to test the assumptions.The research build the intellectual capital model for the software firms, the IC was divided into 5 components as human capital, decision-making capital, relationship capital, customer capital and process capital. These 5 components was divided in two categories , one is basic IC ,including human capital ,decision capital, relation capital and process capital, The other is customer capital as core IC.We build the direct model of the impact from IC on the firm growth , after testing assumptions ,we find there is significantly relation between the 5 IC components and firm growth.The second step is indirect model, we use core IC ( customer capital ) as intermediate variable , and find that core IC has the significant the intermediate effect on the relationship between basic IC and firm growth. In the whole model , most relations between basic IC and firm growth are not significant, while the relation between basic IC and core IC , as well as the relation between core IC and firm growth is significantly. It shows us that the core IC is the intermediate variable between the basic IC and firm growth. It tells us the basic IC and core IC do not serve the same role in the model, the basic IC strength the core IC ,then affect the firm growth speed.From the trend we can know that the management of IC have growing importance on the enterprises. Only those firms who can access, use intellectual capital effectively can get competitive advantage and fast growth in the hard competition. This dissertation give the suggestions that software managers to mind the great importance of core IC( customer capital), firms must improve customer value to strength growth. Only in this way ,they can promote the rapid growth of the software companies and gain the competitive advantage.The main innovation include:1. This dissertation is a study on the firm growth theory and intellectual capital in our developing countries, it expands the growth theory, the IC theory comes from the west countries to China, there is no such research framework in China. This dissertation verified the fitness of these theories to China ,a transaction period society, and the research result will simply fill the existing literature gap which is based on the developed countries such as the United States , Japan ,Israel and Britain . It will enrich the research results in related field.2. The intellectual capital management research has important role in firm growth literature. This dissertation analyses intellectual capital management, which is the key factors to software firms growth. The research in this subject is seldom been found.3. Based on the literature about the IC management literature and practice ,the author add new variable : process capital, which means the high R&D investment and complexity show the characteristic of software firms software development efficiency. We put forward a 5 dimensions of two-level model, the 5 dimensions are human capital, decision capital , relation capital, process capital and customer capital. The two-level are basic IC and core IC. The 5 dimentions of two-level model explore the IC management in software firms, It can help us to find the source advantage by exploring the affection mechanism of IC on growth. The author build the direct model between the IC and firm growth and indirect model between the basic IC , core IC and firm growth. Integrate the affections of 5 IC dimentions on firm growth. We can get the mechanism of influence from IC on growth.We explore the affection mechanism of IC on firm growth in whole model, and find that the various dimentions of IC on growth are different. The customer capital is core IC , the basic IC will strength the core IC and then strength the firm growth. The customer capital are the intermediary variable and they are the source of advantage and growth of software firms.4. We find that the IC : customer capital, human capital , process capital, relation capital ,decision capital, have significant impact on firm growth , while the innovation capital does not influence on firm growth .its' coefficient is 0.019 ,with sig 0.791. This is unexpected by most researchers. This conclusion shows that firms can not focus on innovation especially. The customer capital can stimulate firm growth. Too much innovation will not only waste resource but also hurt growth.5. We find that process capital is negative related with firm growth ,which is different from the previous researches. In the direct model, regression coefficient is -0.233, significance probobility is 0.003; In the whole model ,the regression coefficient is -0.354, the significance probability is 0.002. We find that the regression coefficient is signicicantly negative both in direct and whole model, which shows that the process capital is negative related with firm growth in software industry. It tells us that our software firms can not apply process management mechanically, The firm growth will be decreased if software firms can not control process management well.Growth of software firms is very complicated, even this dissertation discusses the relationship between the IC and growth , it is still a very tiny step. There is much obvious defection of this dissertation. It need more research to explore the firm growth theory and practice.