This empirical study examines the intellectual capital (IC) performance of Hong Kong companies and its association with business performance. Data were collected from constituent companies of the Hang Seng Index listed on the Hong Kong Stock Exchange (2005–2008). An IC measurement, Value Added Intellectual Coefficient (VAIC^TM), was utilised to evaluate the IC investment of the companies.

Four accounting ratios: market-to-book value (MB), return on assets (ROA), asset turnover (ATO) and return on equity (ROE) were used as the indicators of business performance. Regression analyses were conducted to test the ability of IC and its components in order to explain the variance in business performance measures.

No conclusive evidence was found to support the associations between VAIC^TM as an aggregate measure and the four financial indicators. However, components of VAIC^TM were found to predict a substantial variance in business performance. Capital Employed Efficiency (CEE) was found to be a key factor in predicting business financial performance. Structural Capital Efficiency (SCE) was found to have a significant effect on businesses' market valuation, as measured by MB, and on profitability, as measured by ROE. Negative correlations were found between Human Capital Efficiency (HCE) and the financial indicators. The findings indicate a gap between the traditional accounting perspective and the value creation perspective, which is central to the VAIC^TM methodology in measuring IC.

It is believed that the findings of this research provide insights for business stakeholders of Hong Kong companies in utilising IC, particularly the noted impact of structural capital. While our findings indicate the importance of IC for corporations, as shown by the significant effect of SCE on ROE, physical and financial assets may still be considered as the key resources in delivering business success.