A Longitudinal Assessment of Intellectual Capital of Companies Listed on Malawi Stock Exchange

Abstract

The significant of intellectual capital to achieving competitive advantage in today’s knowledge-based economy is undeniable. Companies are depending more on intellectual rather than physical capital. Generation and exploitation of knowledge is what is playing a predominant part in the process of wealth creation. The study was aimed at making a longitudinal assessment of the level of intellectual capital in companies listed on the Malawi Stock Exchange for a five year period 2008-2012. Using the market-to-book value method, the results suggested that intellectual capital was a significant part of the total value of the listed companies. However, the results indicated that the value of intellectual capital has been declining significantly over the period, raising concerns over the long run competitiveness of the companies and the economy as a whole. As such the study recommends further studies to empirically determine the factors contributing to the decline and the required remedy.

Keywords: Intellectual capital, Malawi Stock Exchange (MSE), Market Capitalization Methods (MCM)