Does Intellectual Capital Efficiency Enhance Market Valuation in Digitally
Transforming Firms? Evidence from India

Yuvraj Jain

doi:10.46609/IJSSER.2026.v11i08.019

Title: Does Intellectual Capital Efficiency Enhance Market Valuation in Digitally Transforming Firms? Evidence from India
Authors: Yuvraj Jain
Journal: International Journal of Social Science and Economic Research (IJSSER) ISSN: 2455-8834 Volume: 11 Issue: 8 Publication Date: August 2026 DOI: 10.46609/IJSSER.2026.v11i08.019
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Yuvraj Jain Shiv Nadar School, Faridabad
MLA 8 Jain, Yuvraj. "Does Intellectual Capital Efficiency Enhance Market Valuation in Digitally Transforming Firms? Evidence from India." Int. j. of Social Science and Economic Research, vol. 11, no. 8, Aug. 2026, pp. 3893-3908, doi.org/10.46609/IJSSER.2026.v11i08.019. Accessed Aug. 2026. APA 6 Jain, Y. (2026, August). Does Intellectual Capital Efficiency Enhance Market Valuation in Digitally Transforming Firms? Evidence from India. Int. j. of Social Science and Economic Research, 11(8), 3893-3908. Retrieved from https://doi.org/10.46609/IJSSER.2026.v11i08.019 Chicago Jain, Yuvraj. "Does Intellectual Capital Efficiency Enhance Market Valuation in Digitally Transforming Firms? Evidence from India." Int. j. of Social Science and Economic Research 11, no. 8 (August 2026), 3893-3908. Accessed August, 2026. https://doi.org/10.46609/IJSSER.2026.v11i08.019.
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ABSTRACT: The increasing importance of knowledge-based resources has shifted the focus of value creation from tangible assets to intellectual assets, making intellectual capital an essential determinant of corporate competitiveness and market valuation. Despite extensive research, empirical evidence on the relationship between intellectual capital and firm market value remains inconclusive, particularly in emerging economies. This study examines the impact of Intellectual Capital Efficiency, measured using the Modified Value Added Intellectual Coefficient (MVAIC), on the market value of Indian listed firms. The study employs a balanced panel dataset comprising 50 Indian listed firms over the period 2020–2025, resulting in 300 firm-year observations. The empirical analysis employs panel data estimation techniques, including Pooled Ordinary Least Squares, Random Effects, and Two-Way Fixed Effects models. Model selection is based on the Redundant Fixed Effects and Hausman tests, both of which support the use of the Two-Way Fixed Effects model with robust Panel Corrected Standard Errors. The findings reveal that Intellectual Capital Efficiency has a statistically significant negative impact on firm market value. These findings challenge the conventional expectation of a positive relationship between intellectual capital efficiency and firm value and suggest that the market may not uniformly reward firms for improvements in intellectual capital efficiency. The study contributes to the growing literature on intellectual assets by providing empirical evidence from the Indian context using the more comprehensive MVAIC framework and offers valuable insights for managers, investors, and policymakers regarding the role of intellectual assets in corporate valuation.

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