Does Digital Transformation Moderate the Effect of Intellectual Capital on Firm Performance?

This study examines the independent and joint effects of digital transformation and intellectual capital on firm performance in the Vietnamese context. We utilize data from the annual reports of 118 publicly listed Vietnamese firms from 2011 to 2021. Intellectual capital is measured using the modified value-added intellectual coefficient (MVAIC) model, and the generalized method of moments is employed. In addition, we use the threshold regression estimator to examine these effects at varying levels of intellectual capital. Our results indicate that intellectual capital enhances firm performance, whereas digital transformation negatively affects firm performance in Vietnam. However, when digital transformation is implemented together with investing in intellectual capital, their joint effect positively contributes to firm performance. We also find that the positive impact of digital transformation on firm performance is more pronounced when intellectual capital is high. These findings offer valuable insights for executives and policymakers on effectively leveraging intellectual capital and managing digital transformation to support firm performance in Vietnam.