Thesis Intellectual capital and its effects on the performance of firms, sectors and nations

MINISTRY OF EDUCATION AND TRAINING HO CHI MINH CITY OPEN UNIVERSITY TRAN PHU NGOCGOC INTELLECTUAL CAPITAL AND ITS EFFECTS ON THE PERFORMANCE OF FIRMS, SECTORS AND NATIONS DOCTORAL DISSERTATION IN BUSINESS ADMINISTRATION HO CHI MINH CITY – 2024 i MINISTRY OF EDUCATION AND TRAINING HO CHI MINH CITY OPEN UNIVERSITY TRAN PHU NGOC TRAN PHU NGOC INTELLECTUAL CAPITAL AND ITS EFFECTS ON THE PERFORMANCE OF FIRMS, SECTORS AND NATIONS Majors: BUSINESS ADMINISTRATION Code: 9340101 DOCTORAL DISSERTATION IN BUSINESS ADMINISTRATION Supervisors: Supervisors: 1. Dr. Vo Hong Duc 2. Dr. Van Thi Hong Loan HO CHI MINH CITY – 2024 ii DECLARATION I, Tran Phu Ngoc, declare that the PhD thesis entitled Intellectual Capital and Its Effects on The Performance of Firms, Sectors and Nations is entirely original and has not been submitted for any other degree or diploma at any university or institution. To the best of my knowledge, this thesis does not include any material that has been previously submitted, either in full or in part, for any academic degree or diploma. Unless otherwise stated, this work is solely my own, conducted under the primary supervision of Dr. Vo Hong Duc and Dr. Van Thi Hong Loan. Ho Chi Minh city, July , 2024 Tran Phu Ngoc iii ACKNOWLEDGEMENTS This thesis would not have been possible without the support of my principal supervisor, Dr. Vo Hong Duc. I am profoundly grateful to Dr. Duc for his dedication, invaluable guidance, scholarly support, and generous commitment of time throughout this process. Without his assistance, this thesis would not have come to fruition. I also wish to express my gratitude to Dr. Van Thi Hong Loan for her insightful comments and for inspiring me to complete this work. Special thanks go to my friends at The CBER – Research Centre in Business, Economics & Resources at Ho Chi Minh City Open University, Ho Minh Chi, and Tran Pham Khanh Toan, whose encouragement and support were instrumental in completing this thesis. I could not have completed this journey without the love and encouragement of my family and friends. I am deeply appreciative of my late father, who believed in my potential, and my mother, who is always proud of my achievements. Lastly, I extend my heartfelt thanks to my wife, Huyen Co, for her patience and support in making this dream a reality. I dedicate this thesis to my beloved daughter, Kha Han, whose inspiration and courage helped me overcome all hardships throughout this journey. iv ABSTRACT In a knowledge-based economy, firms put great effort into remaining competitive. Various economic sectors have also adopted strategies to demonstrate resilience in a competitive environment. Nations are no exception. In the era of economic integration, countries have to utilize all available resources to achieve sustainable national performance and development. While tangible assets are limited and their use is at the limit, the role of intangible assets has become important. Intellectual capital, considered a critical asset, refers to the intangible assets contributing to value creation for firms, sectors, and nations. Intellectual capital includes three distinct components: human, structural, and relational. The important role of intellectual capital in driving performance is crucial. Accumulating and using intellectual capital efficiently provide significant effects and implications for the success of firms, sectors, and nations. Previous research has focused on understanding the role of intellectual capital at a firm level. However, there is no well-established and generally agreed-upon approach for measuring intellectual capital at a sector or national level. As such, this dissertation aims to achieve two objectives. The first objective is to measure intellectual capital at three levels: firm, sector, and nation. The second objective is to examine the impact of intellectual capital on the firm performance, sectors' performance, and the country's growth. The findings from this dissertation are crucial for policymakers, practitioners, and executives to consider the roles of intellectual capital to maximize the benefits of this important asset. Specific tasks from the first research objective – measuring intellectual capital – can be summarized as follows. First, data are manually collected from the annual reports of 150 firms listed in Vietnam from 2011 to 2018. These firms are classified into two categories: financial firms and non-financial firms. This dissertation subsequently uses the modified value-added intellectual coefficient (MVAIC) method to compare the differences regarding the intellectual capital level between financial and non-financial firms in Vietnam. Second, a new sectoral intellectual capital index is developed to measure the intellectual capital level across 12 sectors in Vietnam from 2011 to 2018. v Third, data from 104 nations from 2000 to 2018 are collected to construct a new index of national intellectual capital (INIC). In addition, the following tasks are conducted to achieve the second research objective – examining the effects of intellectual capital on a firm's performance (at a firm level) and sector's performance (at the sector's level) and economic performance (at a nation's level). This study employs the generalized method of moments (GMM) estimation technique to investigate how intellectual capital affects financial and non- financial firms' performance. The dynamic common correlated effects (DCCE) estimation method is used to examine the effects of intellectual capital on the sector's performance. Finally, this dissertation examines the impacts of intellectual capital on economic performance across nations using DCCE method. The main results from this dissertation can be summarized as follows. First, a significant difference in intellectual capital level between financial and non-financial firms in Vietnam. The empirical results indicate that intellectual capital positively affects firm performance in Vietnam. These findings imply that non-financial firms will need to invest in building their intellectual capital to increase their competitive advantage. Second, intellectual capital at the sector's level has been found to improve the performance of sectors in Vietnam over the last decade, especially during the COVID-19 pandemic, which has put sectors under severe pressure. These findings highlight the need for improving intellectual capital efficiency at the sectoral level to remain competitive and prepare for future adverse events. Third, the intellectual capital level varies significantly across countries and Vietnam, from the current standing regarding intellectual capital ranking compared with other countries, has a significant task to improve intellectual capital for the nation. Finally, the empirical results confirm that intellectual capital at the national level supports GDP per capita – an indicator of a country's economic performance. The contributions of this dissertation to the existing literature on intellectual capital, its measurement and its effects on performance are threefold. First, the study examines the differences in intellectual capital level between the financial and non- financial in Vietnam and the impact of intellectual capital on firm performance. The findings provide valuable managerial implications for practitioners and firm executives. vi Second, this dissertation pioneers the development of indices for measuring intellectual capital for sectors and nations. These indices can be used to examine the effects of intellectual capital on different managerial and economic issues. Third, to the best of the author's knowledge, this dissertation is the first to measure intellectual capital for firms, sectors, and nations in Vietnam and consider its effects on performance in the Vietnamese context in the same place. vii TABLES OF CONTENTS DECLARATION ........................................................................................................... iii ACKNOWLEDGEMENTS .......................................................................................... iv ABSTRACT ................................................................................................................ v TABLES OF CONTENTS .......................................................................................... viii LIST OF ACRONYMS ................................................................................................ xii LIST OF FIGURES ..................................................................................................... xiii LIST OF TABLES......................................................................................................... xv LIST OF PUBLISHED PAPERS ................................................................................ xvi CHAPTER 1 INTRODUCTION .................................................................................. 1 1.1 Introduction ............................................................................................ 1 1.2 Research problems .................................................................................. 4 1.3 Research gap ........................................................................................... 6 1.3.1 Intellectual capital and its effects to firm’s performance: financial firms versus non-financial firms ...................................................................... 6 1.3.2 Sectoral intellectual capital and its effects to performance across sectors ............................................................................................................... 8 1.3.3 National intellectual capital and its effects to national performance ..... 9 1.4 Research objectives .............................................................................. 11 1.4.1 The main objective ............................................................................... 11 1.4.2 Specific objectives ................................................................................ 11 1.5 Research questions ............................................................................... 12 1.6 Research subject and scope .................................................................. 12 1.7 Contributions of the study .................................................................... 12 1.8 Research framework and steps ............................................................. 13 1.9 The outline of the dissertation .............................................................. 17 1.10 Summary ............................................................................................... 18 CHAPTER 2 LITERATURE REVIEW ..................................................................... 19 2.1 Definitions and classifications .............................................................. 19 2.1.1 Saint-Onge’s model .............................................................................. 20 2.1.2 Sveiby’s model ..................................................................................... 22 2.1.3 Skandia intellectual capital value scheme ............................................ 23 viii 2.1.4 Sullivan’s model ................................................................................... 24 2.2 Relevant theories .................................................................................. 25 2.2.1 Resource-based theory .......................................................................... 25 2.2.2 The knowledge-based theory ................................................................ 26 2.2.3 Performance-based theory .................................................................... 27 2.3 Measuring intellectual capital: traditional methods ............................. 28 2.3.1 Balanced scorecard ............................................................................... 30 2.3.2 Technology Broker ............................................................................... 31 2.3.3 Intangible assets monitor ...................................................................... 32 2.3.4 Skandia navigator ................................................................................. 33 2.3.5 Value Added Intellectual Coefficient™ (VAIC™) .............................. 34 2.4 Measuring intellectual capital: extended analysis for sectors and nations ............................................................................................................. 36 2.4.1 Sectoral intellectual capital measurements ........................................... 37 2.4.2 National intellectual capital measurements .......................................... 40 2.5 Measuring performance of firm, sector and nation .............................. 46 2.5.1 Firm performance ................................................................................. 47 2.5.2 Financial performance for sector .......................................................... 47 2.5.3 Performance of the nation..................................................................... 48 2.6 The effects of intellectual capital on performance of firms, sectors and nations ................................................................................................... 50 2.6.1 Intellectual capital and firm’s performance .......................................... 50 2.6.2 Intellectual capital and sector performance .......................................... 55 2.6.3 Intellectual capital and national performance ....................................... 57 2.7 Summary ............................................................................................... 60 CHAPTER 3 METHODOLOGY ............................................................................... 61 3.1 Data ....................................................................................................... 61 3.2 Research methods ................................................................................. 63 3.2.1 Assess the impact of intellectual capital on firm performance ............ 63 3.2.2 Assess the impact of intellectual capital on the performance of sector and nation ............................................................................................. 66 3.3 Variables: definitions and measurements ............................................. 72 ix 3.3.1 Measuring intellectual capital at firm level .......................................... 72 3.3.2 Sectoral intellectual capital index ......................................................... 74 3.3.3 New index of national intellectual capital ............................................ 74 3.3.4 Other variables ...................................................................................... 79 3.4 Summary ............................................................................................... 80 CHAPTER 4 MEASURING INTELLECTUAL CAPITAL: THE ANALYTICAL ANALYSIS .......................................................................................... 81 4.1 An intellectual capital level for Vietnamese listed firms ..................... 81 4.2 An intellectual capital across sectors in Vietnam ................................. 83 4.3 Measuring national intellectual capital: a tale of two indices .............. 86 4.4 A national intellectual capital across nations ....................................... 88 4.4.1 National intellectual capital by region .................................................. 88 4.4.2 National intellectual capital by income ................................................ 90 4.5 Summary ............................................................................................... 96 CHAPTER 5 EMPIRICAL RESULTS ON THE EFFECTS OF INTELLECTUAL CAPITAL ON PERFORMANCE OF FIRM, SECTOR AND NATION .............................................................................................................. 99 5.1 Intellectual capital and firm performance ............................................. 99 5.1.1 Correlation analysis .............................................................................. 99 5.1.2 Autocorrelation and heteroskedasticity tests ......................................102 5.1.3 The effects of intellectual capital on firm’s performance using panel data estimation: generalized method of moments (GMM) ........................102 5.2 Intellectual capital and financial performance across sectors ............105 5.2.1 The descriptive statistics .....................................................................105 5.2.2 The cross-sectional dependence test ...................................................107 5.2.3 The slope homogeneity test ................................................................107 5.2.4 The panel unit root test .......................................................................107 5.2.5 The panel cointegration test ................................................................108 5.2.6 The effects of intellectual capital on financial performance across sectors using Dynamic common correlated effects technique ...........108 5.2.7 The causality relationship flows between sectoral intellectual capital, sector performance and other variables ..............................................109 x 5.3 Intellectual capital and national performance .....................................111 5.3.1 The cross-sectional dependence test ...................................................113 5.3.2 The slope homogeneity test ................................................................113 5.3.3 The panel unit root test .......................................................................113 5.3.4 The panel cointegration test ................................................................113 5.3.5 The effects of national intellectual capital on national performance using the dynamic common correlated effects .............................................114 5.3.6 The causality relationship flows between national intellectual capital, national performance and other macroeconomic variables ................115 5.4 Summary .............................................................................................118 CHAPTER 6 CONCLUSIONS AND IMPLICATIONS .........................................120 6.1 Research findings ...............................................................................120 6.1.1 Measuring intellectual capital .............................................................120 6.1.2 The effects of intellectual capital on the performance of firm, sector and nation ..................................................................................................122 6.2 Contributions and implications ...........................................................124 6.2.1 Measuring intellectual capital .............................................................124 6.2.2 The effects of intellectual capital on the performance of firm, sector and nation ..................................................................................................128 6.3 Limitations and suggestions for future research .................................131 6.3.1 Firm level ............................................................................................131 6.3.2 Sectoral level ......................................................................................131 6.3.3 National level ......................................................................................132 6.4 Summary .............................................................................................132 REFERENCES ............................................................................................................133 ANNEXURE 1 ............................................................................................................151 ANNEXURE 2 ............................................................................................................156 ANNEXURE 3 ............................................................................................................160 ANNEXURE 4 ............................................................................................................167 xi LIST OF ACRONYMS AR Arellano and Bond test ASEAN Association of Southeast Asian Nations BM Broad money supply CE Domestic credit to the private sector by banks CEE Capital employed efficiency DCCE Dynamic common correlated effects FE Fixed effects GDP Gross domestic product GMM Generalized method of moments HCE Human capital efficiency INIC Index of national intellectual capital IVs Instrument variables LEV The ratio between total debt and total assets of firms MVAIC Modified value-added intellectual coefficient OLS Ordinary least squares PCA Principal component analysis PGDP GDP per capita RE Random effects RCE Relational capital efficiency ROA Return on assets ROE Return on equity SCE Structural capital efficiency SICI Sectoral intellectual capital index SIZE The natural logarithm of the total assets TO Trade openness VIF Variance inflation factor US United States 2SLS Two-stage least squares 3SLS Three-stage least squares xii LIST OF FIGURES Figure 1.1 Real GDP growth trends: Vietnam, ASEAN, and the World ................ 2 Figure 1.2 Infrastructure spending, GDP growth rate, and business environment factors ..................................................................................................... 3 Figure 1.3 Global competitiveness and technological readiness ranking ................ 3 Figure 1.4 Research process ................................................................................... 13 Figure 1.5 Research framework ............................................................................. 16 Figure 2.1 Saint-Onge’s model .............................................................................. 21 Figure 2.2 Sveiby’s model ..................................................................................... 23 Figure 2.3 Skandia intellectual capital value scheme ............................................ 24 Figure 2.4 Sullivan’s approach to visualize intellectual capital ............................ 25 Figure 2.5 The balanced scorecard ........................................................................ 31 Figure 2.6 Brooking’s intellectual capital measurement model ............................ 32 Figure 2.7 Intangible assets monitor example ....................................................... 33 Figure 2.8 Skandia navigator ................................................................................. 34 Figure 2.9 The DuPont model ................................................................................ 47 Figure 3.1 Number of listed firms .......................................................................... 62 Figure 4.1 Sectoral intellectual capital index in 2011-2018 period ....................... 85 Figure 4.2 An index of national intellectual capital: Lin, Edvinsson, Chen and Beding (2014) index versus the INIC ................................................... 87 Figure 4.3 National intellectual capital across years by region ............................. 89 Figure 4.4 National intellectual capital across years by income ............................ 91 Figure 4.5 Accumulation of national intellectual capital across years in some countries ................................................................................................ 92 Figure 4.6 Accumulation of national intellectual capital across years in Group of Seven .................................................................................................... 93 Figure 4.7 Accumulation of national intellectual capital across years in Top 10 .. 93 Figure 4.8 The accumulation of national intellectual capital for the Asia-Pacific countries for almost two decades, from 2000 to 2018 ......................... 95 Figure 4.9 National intellectual capital around the globe ...................................... 96 xiii Figure 5.1 The causality relationship flows between sectoral intellectual capital, sector performance and other variables ..............................................111 Figure 5.2 The causality relationship flows between national intellectual capital, national performance and other macroeconomic variables ................117 xiv LIST OF TABLES Table 2.1 Summary - Sectoral intellectual capital measurements ........................ 39 Table 2.2 Summary - National intellectual capital (NIC) measurements ............ 45 Table 2.3 Summary - Intellectual capital and firm performance .......................... 54 Table 2.4 Summary - Intellectual capital and sector performance ....................... 56 Table 2.5 Summary - Intellectual capital and national performance .................... 59 Table 3.1 Three components, and their proxies, of the new index of national intellectual capital (INIC) ..................................................................... 79 Table 4.1 Descriptive statistics of the full sample ................................................ 82 Table 4.2 Descriptive statistics for financial firms and non-financial firms ........ 83 Table 4.3 National intellectual capital by region .................................................. 89 Table 4.4 National intellectual capital by income ................................................ 90 Table 5.1 Regression models ................................................................................ 99 Table 5.2 The pairwise correlation coefficients and the variance inflation factor (VIF) among variables ........................................................................101 Table 5.3 Empirical results using GMM estimations .........................................104 Table 5.4 Regression models ..............................................................................105 Table 5.5 Descriptive statistics ...........................................................................106 Table 5.6 Correlation matrix and the variance inflation factor among variables ..... ............................................................................................................107 Table 5.7 Empirical results - The effects of intellectual capital on financial performance across sectors .................................................................108 Table 5.8 The causality relationship flows between sectoral intellectual capital, sector performance and other variables ..............................................110 Table 5.9 Measurements of variables and data sources......................................112 Table 5.10 Empirical results - The effects of national intellectual capital on national performance ........................................................................................114 Table 5.11 The causality relationship flows between national intellectual capital, national performance and other macroeconomic variables ................116 xv LIST OF PUBLISHED PAPERS 1. Vo, D. H., & Tran, N. P. (2024). Does national intellectual capital matter for economic growth in the Asia–Pacific economies?. Journal of Intellectual Capital, 25(2/3), 253-274. 2. Vo, D. H., & Tran, N. P. (2024). Sectoral Intellectual Capital and Sector Performance in an Emerging Market. Montenegrin Journal of Economics, 20(2), 209-220. 3. Vo, D.H., Van, L.T.-H., Hoang, H.T.-T., & Tran N.P. (2023). The interrelationship between intellectual capital, corporate governance and corporate social responsibility. Social Responsibility Journal, 19(6), 1023-1036. 4. Vo, D.H., & Tran, N.P. (2023). Measuring national intellectual capital and its effect on country’s competitiveness. Competitiveness Review, 33(4), 820-839. 5. Tran, N.P., & Vo, D.H. (2022). Do banks accumulate a higher level of intellectual capital? Evidence from an emerging market. Journal of Intellectual Capital, 23(2), 439-457. 6. Tran, N.P., Dinh, C.T.H., Hoang, H.T.T., & Vo, D.H. (2022). Intellectual Capital and Firm Performance in Vietnam: The Moderating Role of Corporate Social Responsibility. Sustainability, 14, 12763. 7. Van, L.T.-H., Vo, D.H., Hoang, H.T.-T., & Tran N.P. (2022). Does Corporate Governance Moderate the Relationship between Intellectual Capital and Firm’s Performance?. Knowledge and Process Management, 29(4), 333-342. 8. Vo, D.H., & Tran, N.P. (2021). Measuring national intellectual capital: a novel approach. Journal of Intellectual Capital, 23(4), 799-815. 9. Vo, D.H., & Tran, N.P. (2021). Intellectual capital and bank performance in Vietnam. Managerial Finance, 47(8), 1094-1106. 10. Tran, N.P., Van, L.T.-H., & Vo, D.H. (2020). The nexus between corporate governance and intellectual capital in Vietnam. Journal of Asia Business Studies, 14(5), 637-650. xvi CHAPTER 1 INTRODUCTION This chapter presents and discusses the background and rationales for conducting this study and its novelty concerning intellectual capital measurement and the effects of intellectual capital on the performance of firms, sectors and nations. 1.1 Introduction In the context of the knowledge-based economy, firms enhance their competitive advantage by shifting from tangible assets into intangible assets (Stewart, 1997; Sveiby, 1997). Castro et al. (2019) consider that intellectual capital plays a major role in the knowledge-based economy and is the key driver of firm’s sustained competitive advantages. Intellectual capital is defined as unique skills, knowledge, and solutions that can be converted into value in the market, leading to an increase in firm’s competitiveness, productivity, and market value (Pulic and Kolakovic, 2003). The role of intellectual capital in firm’s performance is increasing, so it is necessary to examine the dynamics of this role and the contributions of intellectual capital to firm’s performance. Inkinen (2015) demonstrates that firms can benefit from a variety of intellectual capital profiles. This means that some businesses require high levels of overall intellectual capital to achieve impressive performance, while others can still achieve positive results with relatively low structural or relational capital. In addition, the impact of intellectual capital on a firm performance primarily stems from its combinations, interactions and mediating effects. Furthermore, there is substantial proof highlighting the important connection between intellectual capital and a firm's innovation performance (Song, 2022; Inkinen, 2015). Various studies have been conducted to examine the effects of intellectual capital on firm’s performance with a focus on financial firms (Haris et al., 2019; Firer and Williams, 2003) and manufacturing firms (Xu and Wang, 2019). Xu and Li (2019) find a difference in intellectual capital efficiency between high-tech and non-high-tech small and medium-size firms in China. The impacts of intellectual capital on firm’s performance in the emerging markets in the Asian region has been examined in previous studies (Indonesia, Soetanto and Liem, 2019; Thailand, Tran and Vo, 2018; Malaysia, Goh, 2005). In particular, Soetanto and 1 Liem (2019) argue that intellectual capital affects the market-to-book value of the knowledge-based sectors, which have intensively used technology and/or human capital. In a study on Thailand’s banking sector, Tran and Vo (2018) conclude that bank profitability is driven mainly by the efficiency of capital employed. Goh (2005) asserts that banks have accumulated a lower level of structural capital efficiency than human capital efficiency. Since joining the Association of Southeast Asian Nations (ASEAN), Vietnam has emerged as a country with remarkable national performance and development. In recent years, leaders in the miracle of national performance among ASEAN members have been emerging markets, such as Vietnam (OECD, 2018). Figure 1.1 indicates that the pattern of real growth in the gross domestic product (GDP) in Vietnam is stable and higher than that of other emerging countries, such as Indonesia, Malaysia, the Philippines, and Thailand. Since 2000, Vietnam's GDP per capita has grown by 6.4 percent annually—one of the fastest rates in the world (Trieu, 2019). In addition, Vietnam has closely integrated into the regional and world economy, with strong trade commitments, such as the European-Vietnam Free Trade Agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the Vietnam- Eurasian Economic Union Free Trade Agreement, and the ASEAN–Hong Kong, China Free Trade Agreement, to name a few. 10.0% Vietnam ASEAN 5 World 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% Source: IMF (2020). ASEAN 5: Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. Figure 1.1 Real GDP growth trends: Vietnam, ASEAN, and the World1 1 Singapore is not included because of differences in population size, income, infrastructure and technology levels. 2 In addition, as shown in Figure 1.2, Vietnam has increased its investment in infrastructure to bridge the gap with other ASEAN member countries. Vietnam’s spending on infrastructure represents the second fastest among the ASEAN members, 11.5 percent, which is almost doubled the rate of GDP growth for the period 2012-2016. However, the business environment in Vietnam is still maturing. The gaps in the institutional quality undermine investors’ confidence. Figure 1.2 also indicates that satisfaction with the investment environment is still lower in Vietnam than in other emerging markets in Asia. Source: PwC (2018). Figure 1.2 Infrastructure spending, GDP growth rate, and business environment factors2 Moreover, based on the 2017-2018 global competitiveness index, Vietnam lagged behind that of other ASEAN members, such as Malaysia, Indonesia, and Thailand. Vietnam has a competitive advantage from its relatively low labor costs. However, its low technology readiness (in the technology readiness ranking, as presented in Figure 1.3) poses a disadvantage for Vietnam in technological innovation and automation. Global Competitiveness Index, Economist Intelligence Unit Country institutions pillar ranking, technological readiness ranking, 2018- 2017-2018 2022 Indonesia 47 67 Malaysia 27 27 Philippines 94 55 Thailand 78 49 Vietnam 79 65 Source: PwC (2018); Economist Intelligence Unit (2018). Figure 1.3 Global competitiveness and technological readiness ranking 2 Singapore is not included because of differences in population size, income, infrastructure and technology levels. 3 On the above observations, The Vietnamese firms are facing great opportunities and challenges. For example, the ongoing Covid-19 pandemic worldwide puts firms in a new state, a new environment. The Vietnamese firms have faced new challenges that have never occurred in the past. Therefore, The Vietnamese firms need to be flexible in their production plans, business strategies and images and branding. The diversified knowledge-based economy plays an important role in all areas of life and society and gradually replaces the industrial economy, which only focuses on production and consumption. In order to meet the important requirements of the knowledge-based economy, firms need to thoroughly utilize the value from intellectual capital – an important intangible asset. The development of the knowledge-based economy enhances the role of intellectual capital in businesses and society and pushes it to a new level. This practice requires firms to use and implement appropriate and flexible policies to utilize the value of resources, which are considered intangible, from firms including skills, knowledge, innovation, and relationship with customers. 1.2 Research problems Edvinsson and Malone (1997) consider that intellectual capital includes two main categories: human capital and structural capital. Pulic (1998) introduces a value-added intellectual coefficient (VAIC) model to measure intellectual capital efficiency. This model separates intellectual capital into three components, including (i) human capital, (ii) structural capital and (iii) capital employed. Other studies such as Nimtrakoon (2015); Vishnu and Gupta (2014); and Nazari and Herremans (2007) also propose a modified value-added intellectual coefficient (MVAIC) model. The MVAIC model has been widely used in measuring intellectual capital efficiency at firms’ level (Bayraktaroglu et al., 2019; Xu and Wang, 2019; Chen et al., 2015). In addition, the strategy of spreading knowledge of firms is not only for themselves, but also extends to the sector, region and country (Pedro et al., 2018). Medina et al. (2007) argue that policymakers can identify solutions to enhance the intangible resources of the sector or region through the analysis of their intellectual capital in order to achieve a sustainable growth. Marcin (2013) presents countries around the world are increasingly interested in measuring intellectual capital across sectors. As such, it is important and necessary to develop a new sectoral intellectual capital in 4