Innovation Capital and Firm's Performance in Malaysian Public Companies

Innovation has been recognized as one of the important factors of economic growth. U.S. Department of Commerce defines innovation as the design, development and implementation of new or altered products, services, processes, organizational structures, and business models to create value for the customer and financial returns for the firm practicing innovation. In Malaysia, innovation takes center stage in the New Economic Model that has been recently announced. In fact, many countries in the region and around the world now aspire to drive growth through innovation. Due to its importance, it inspires us to study on how an innovation capital affect to firm's performance. The purpose of this study is to contribute to the understanding of innovation capital in Malaysian Public Companies. The study adopts a quantitative approach whereby the data of specific innovation drivers were retrieved from the annual reports of Malaysian Public Companies. The study will also investigate empirically the relation between the innovation capital and its impact on firm performance of Malaysian Public Companies. The study evaluates whether firms with high innovation intensities perform better than firms with low intensities. Due to the mix results in previous studies, it encourages the researchers to conduct such study and conclude these relationships. The results will extend the understanding of the role of innovation capital in enhancing the performance of companies in the developing countries. Therefore, the findings from this study may serve as a useful input for scholars and managers to better understand the implication of innovation capital to the firm performance. Thus, managers can use the innovation capital information to create higher value and maintain long-term competitiveness.