Linking intellectual capital and intellectual property to company performance

Purpose – The purpose of this paper is to link empirically the value of intellectual capital and intellectual property to firm performance. Design/methodology/approach – Survey data from managers in the (German) pharmaceutical industry is used to conduct a regression analysis focusing on the correlation between human, structural and relational capital, intellectual property and firm performance. Findings – The results of the study show that including intellectual property in models linking intellectual capital to firm performance enhances the statistical validity of such models and their relevance for management. Practical implications – Intellectual capital is an important source of an organization's economic wealth and is therefore to be taken into serious consideration when formulating the firm's strategy. This strategy formulation process can be enhanced by fully integrating intellectual property and intellectual capital into management models, as shown in this paper. Originality/value – This empirical paper builds on and extends the Bontis research on the relationship between intellectual capital and firm performance. Contrary to Bontis the authors include intellectual property into the intellectual capital framework and focus on the role of intellectual property in the relationship between intellectual capital and firm performance.