Impact of Intellectual Capital on the Financial Performance of SMEs Operating in Tourism Sector of Azad Jammu and Kashmir Pakistan

Muhammad Khalique*, and T. Ramayah *
Universiti Sains Malaysia *

Abstract: in contemporary business, environment intellectual capital is considered as one of the prime strategic assets for the success and sustainability of small and medium enterprises (SMEs). SMEs play a crucial in the development of national economy, generating revenue, providing employment and uplifting the social status of low-income group in the society. Azad Jammu and Kashmir has tremendous potential to explore new avenues to establish SMEs. Integrated Intellectual Capital Model was used to examine the impact of intellectual capital on the financial performance of SMEs. In this empirical study a total of 182 individuals were involved. The targeted respondents of study were selected through convenience sampling technique. Multiple regression analysis was used to test the six research hypotheses that were proposed to validate the Integrated Intellectual Capital Model. The empirical findings of this study revealed that the intellectual capital has significant contribution on the financial performance of SMEs. This study is a unique study in Azad Jammu and Kashmir region and it will be a milestone for potential researchers in this area.

Keywords: Intellectual capital, integrated intellectual capital model, business environment, tourism sector, Azad Jammu and Kashmir, Pakistan