The intention of this experiential analysis is to explore the stimulus of intellectual capital (IC) on the financial performance of firms itemized in financial sector on Bursa Malaysia Berhad. Scholars regard intellectual capital as a market value creator. In the era of information technology, competitive advantage can only be found through intangible assets (intellectual capital). Nowadays, the factors of production have changed to information and knowledge. Therefore, the execution of Knowledge based Economy (K-economy) is necessary for an improved development and competitiveness. The Malaysian economy of today has changed from a Peconomy which stands for production economy to K-economy whereby the knowledge has been the main key driver. Today, in the k-economy, knowledge is known as one of the primary factors in sustaining economic growth apart from land, labour and physical capital. This study measure IC by the value-added Intellectual coefficient measurement model. Most of the scholars regards finance industry as a knowledge-based industry, thus this industry is encompassed. Hence, it generates it a perfect sector for study on intellectual capital. Knowledge based industries are considered as the strength of the new economy called knowledgebased economy. Economists believe financial sector has a major contribution in long term economic growth and development, also the important pillar for economy.

This article discusses on the importance of Intellectual Capital in organization. In this new millennium, the dependence on intellectual capital has an indispensable rise on the economy from industrialization into knowledge-based economy. The main motivation behind this study is to educate that intangible asset is recognized as the key driver of efficiency and economic growth. Moreover, the competitive business environment is compulsory for firm to apply an innovative method to conduct business. Therefore, Intellectual Capital is needed to protect the organizations against the demand of innovation and competitive business environment in today's knowledge-oriented economy. Nowadays, sources of economic value and wealth encompasses not only the goods manufactured by organizations but also their intangible assets. Hence, intellectual capital will attribute to additional role in generating values. In the knowledge based socio-economic period where intellectual capital has become one of the production factors, performance measurements for organization may not be viable with traditional accounting practices any longer as many people value intellectual somewhat than physical resources. The main idea of exploring Intellectual Capital in banking industry is because of the nature of banking industry as a knowledge intensive industry. Moreover, countries economy and growth highly dependent on monetary and financial stability, thus banking industry plays a crucial role in the development of financial systems.

This paper aims to examine the impact of Intellectual Capital (IC) on a firm's financial performance in the ACE Market of Bursa Malaysia. In the era of the knowledge economy, intellectual capital is considered the dominant factor in contributing to superior performance. Hence, there is an emerging emphasis on intangible assets, and wealth creation is allied with the development and maintenance of intangible resources. The empirical data was covering 81 firms from 2009-2018. This study used the Modified Value-Added Intellectual Capital Model (MVAIC) to measure intangibles by applying a two-step system generalized method of moments (GMM). The result revealed that the MVAIC is significantly related to ROA negatively. It means that MVAIC can predict the future of financial performance and its effect negatively. The results extend the understanding of the role of intellectual capital in creating corporate values and building sustainable advantages for companies in developing countries like Malaysia. Therefore, this research suggests that in the future, studies on intellectual capital and a firm's financial performance should apply dynamic panel and MVAIC model in a broad scope not only specific to the knowledge-based industry. As the importance of intellectual capital is not only limited to knowledge-based industries.

The purpose of this study is to explain the new measurement model for intangible asset named Modified Value-Added Intellectual Capital (MVAIC).This measurement model measured intangible asset in a robust way. MVAIC is a broadly measure of Intellectual capital based on previous VAIC model. However, MVAIC included relational capital efficiency (RCE). The value of relational capital is obtained from the amount of expenses incurred for marketing. The advantage of MVAIC is that it can measure intellectual capitals related to the company's relationship with external parties from a broader perspective. In the context of this relationship, it can be measured by means of monetization, that is, introducing the company to the public through marketing and providing economic benefits that can be provided in the form of services or commodities. This study systematically includes all the past literatures on the measurement model for intangibles. The researcher suggested to use MVAIC measurement model for future studies as it provides better results.

Intellectual capital (IC) is considered a valuable asset for the company's wealth creation and sustainable development; however, the findings regarding its impact on the company's financial performance and intellectual capital are limited and mixed. This paper aims to investigate the endogeneity problem on intellectual capital and firm's performance. In addition, past studies on this particular matter has been using static panel model. Though, the static model may not be able to resolve the reverse causality and endogeneity related to the relationship. Dynamic panel data approach is the best in estimating endogeneity and reverse-causality problems. Therefore, this study suggesting that in the future, researchers should use dynamic models to study these relationships. In order to control the endogenous effect, GMM model is used as it is appropriate for panel data, and it provides consistent results in the presence of endogeneity. This is due to the fact that, GMM estimator can produce consistent results in the presence of heteroscedasticity and resolve autocorrelation by differencing. Dynamic model is recommended as intellectual capital and firm performance is endogenous so the relationship between both of this variable and the regressor may also be correlated with error term.