Are R&D and Intellectual Property Rights Related to the Firms’ Financial Performance? - The Perspectives on Intellectual Capital

R&D and intellectual property rights (IPRs) have been viewed as an essential competitiveness for IT companies to compete with others in the knowledge-based economy. Particularly, the most Taiwan IT firms strive to transform the business model from labor-intensive to knowledge-intensive which aims to endeavor in higher value added activities especially in the trend of micro profit. One of the ways to enhance the profitability is through the effective process of intellectual capital (IC) components. Hence, the goal of this article is to describe the moderator/mediator effects of IT firms' technological capabilities. The study used 362 IT companies listed in Taiwan Stock Market Exchange to examine the relationships among IC components management and furthermore, the results showed that IC components generally have a positive effect on financial performance. Specifically, the findings indicate that HCE was positively related to financial performance while the others are partially related. Additionally, this study also demonstrates that TCE is positively related to IC effectiveness and either directly or indirectly affects financial performance. The study proves that R&D and IPRs as either a moderator or mediator to progressively enrich the firms' financial performance. A discussion of the findings, limitations, and implications are provided