Agency cost and firm performance: The moderating effect of intellectual capital in Asian agribusiness industry

The study examines the influence of intellectual capital on the relationship between agency costs and firm performance using a sample of Asian agricultural firms. The study uses value added intellectual coefficient (VAIC) as a proxy of intellectual capital, which is based on human capital efficiency, structural capital efficiency and employed physical capital efficiency.  Using the data of 9 Asian economies, the findings suggest that intellectual capital, in general, neutralizes the negative effects of agency cost on firm performance. Further analysis reveals that human capital efficiency and capital employed efficiency mitigate while structural capital efficiency has no impact on the negative relationship between agency cost and firm performance. These findings are robust to several robust tests. Overall, the study contributes to the resource-based view of intellectual capital by documenting how firms might neutralize the negative relationship between agency cost and firm performance while emphasizing intellectual capital.