An Examination in the IC Management and Financial performance of Indian SMEs

Presently SMESs are backbone of Indian economy. To obtain competitive advantage in the knowledge economy, it is crucial for small and medium sized enterprises (SME) to utilize their knowledge efficiently and to enhance their Innovation potential. Thus, managing their Intellectual Capital is increasingly important for success and sustainability. Furthermore, reporting of those intangible assets to customers, partners and investors systematically has become a crucial factor of success in the context of the globalization.

In this study an attempt is made to find the effects of intellectual assets in SME's performance. For the purpose of this study data are collected from 30 Indian SMEs which are listed in BSE sme. In our study Value creation efficiency of intellectual capital is measured by Pulic's VAICTM model. Multiple regression analysis is used to analyze the data. The empirical results show that human capital of Indian SMEs has significant contribution towards the organizational performance and shareholders ’value creation. This pilot study extend the IC research by considering Indian SMEs since Indian IC researches are conducted on large organizations ignoring small and medium size organizations.