Capability and efficiency of intellectual capital: The case of fabless companies in Taiwan

  • Authors:
  • Wen-Min Lu;Wei-Kang Wang;Wei-Ting Tung;Fengyi Lin

  • Affiliations:
  • Department of Finance Management, National Defense University, No. 70, Sec. 2, Zhongyang North Road, Beitou, Taipei 112, Taiwan;Department of Accounting, YuanZe University, No. 135, Yuan-Tung Road, Chungli, Taoyuan 320, Taiwan;Department of Accounting, YuanZe University, No. 135, Yuan-Tung Road, Chungli, Taoyuan 320, Taiwan;Department of Business Management, National Taipei University of Technology, No. 1, Sec. 3, Chung-hsiao E. Road, Taipei 106, Taiwan

  • Venue:
  • Expert Systems with Applications: An International Journal
  • Year:
  • 2010

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Abstract

It is important to increase their value by managing intellectual capital (IC), since fabless firms face an intensely competitive environment. The aim of this paper is develops a two-stage production process including IC capability and IC efficiency to characterize the IC performance of the fabless firms using a non-parametric frontier method - data envelopment analysis (DEA). The IC performance rating should be considered as a key element for achieving greater innovation and competitive advantages. The results show that IC efficiency is better than IC capability for these fabless firms; 15.8% of fabless firms perform well in both models and these firms can be treated as benchmarks for others; most firms operate at decreasing returns to scale, indicating that firms are facing a highly competitive environment; further mergers and acquisitions among firms should be considered so as to achieve economies of scale; the critical input/output measures will also help firms improve their performance and identify the key factors that impact a firm's performance.