The Impact of Intellectual Capital on Companies' Performances: A Study Based on MAKE Award Winners and Non-MAKE Award Winner Companies

Organizations believe that obtaining a knowledge management award will not only promote their brands but also enhance their business performance. However, this may or may not be the case as there is no definitive evidence that winning such an award would improve an organization's business performance. The purpose of this study is to explore whether companies that have received the Most Admired Knowledge Enterprise (MAKE) Award boast a better business performance than those that did not get the award (non-MAKE winner companies).This research involves a quantitative analysis of business performance conducted based on the data collected from fifty-nine previous MAKE winners and fifty-nine comparable non-MAKE winner companies according to their market capitalization to identify similarities and differences. This study is limited by its small sample size and the difficulty of identifying the comparable companies as many award winning companies already receive world-class recognition.Based on the data analysis, capital efficiency (CEE) shows much higher explanatory power in the regression among MAKE award winners than their counterparts. Human capital efficiency (HCE) and value added intellectual capital (VAIC) are negatively correlated with ATO in non-MAKE winner companies. However, such correlation is not found in MAKE-award winners. Further implications are discussed in this paper.