Evaluating the efficiency of intellectual capital management for Taiwan IC design industry

Abstract

Management of intellectual capital has been the source of competitive advantages in the new economy. The study employed Data Envelopment Analysis (DEA) and Principal Component Analysis (PCA) to analyzed 62 publicly listed IC design firms in Taiwan. The DEA models using different performance indices were analyzed and their relationships were further explored with PCA. The empirical results revealed that 30 out of 62 firms are efficient in Market Value Added (MVA) or Calculated Intangible Value (CIV) performance dimension. About a quarter of the IC design firms still have much room to improve their intellectual capital management. The purpose of the study aims to provide a benchmark tool for firms to understand their relative strength and weakness in intellectual capital management. The empirical results may help managers frame their future strategy more correctly and enrich the empirical research on intellectual capital management.