Investigating the Effect of Intellectual Capital on Iran’s Economic Growth (System Dynamics Approach)

اقتصاد و توسعه منطقه ای

Article 2, Volume 27, Issue 19, June 2020, Pages 19-48   

Document Type: Original Article

DOI: 10.22067/erd.2020.39492

Authors

Efat Asgari Seymareh¹; Mohammadreza Armanmehr^{* 2}

¹Ma Of Economics, Shahrood University Of Technology

²Assistant Professor of Economics, Shahrood University of Technology, Shahrood, Iran

Abstract

 
Expended Abstract:
Introduction:
Intellectual capital is defined as "the ability to transfer knowledge and intangible assets to resources for wealth creation. Intellectual capital can be recognized as knowledge-based assets that underpin the growth of the country. Knowledge increases the country's wealth if its importance is known and is different from the existing work practices, and Knowledge transfer is essential in this regard. Intellectual capital can be recognized as knowledge-based assets that underpin the growth of the country. In recent decades non-financial assets that constitute intellectual capital are the most important source of wealth creation and national progress. Knowledge and information are the main features of nations seeking development.
 Theoretical frame work:
   Investing in intangible assets is recognized as an essential factor in improving performance. Companies and countries' attention to the use of knowledge has led to creating competitive advantage and the implementation of national and regional innovation systems. Intellectual capital is an abstract and complex concept that is difficult to identify and define and can be examined at firms and countries. Most of the observations have been from the classification of intellectual capital to human capital, communication, and structure, and this model is used in many measurements at the organizational and national levels.
Methodology:
This paper examines the impact of intellectual capital on Iran's economic growth using the system dynamics model.  The system dynamics model is one of the best scientific methods for complex models such as technical, economic, and nonlinear dynamic systems. It is, therefore, appropriate to monitor and evaluate the effects of intellectual capital on economic growth. It is an advanced method of analyzing the dynamic behavior of a complex system. The dynamics model structure gives a better picture of complex systems such as the intellectual capital system and the economic growth system. In this study, the indirect effect of this factor on economic growth has been investigated by changing the factors related to intellectual capital. Realism test and limit condition test, and sensitivity test of variables were performed to examine the behavior of variables, as a result of which the model of this research showed a logical behavior. The study period is 2001-2015, and its simulation is planned until 2031. It is also confirmed based on the DOLS model
Results and Discussion
Within the framework of this study, three hypotheses were examined. According to the first three hypotheses, with increasing intellectual capital, productivity increases and increases with increasing economic growth productivity. Of course, this effect does not happen quickly and is delayed. According to the second hypothesis, when human capital increases, intellectual capital also increases, and according to the third hypothesis, intellectual capital doing activities in a new and better way leads to higher productivity. The results obtained from the system dynamics model indicate the positive and small impact of intellectual capital on Iran's economic growth, which is also confirmed based on the DOLS model. The reason for the small impact of intellectual capital on growth is the lack of infrastructure and complementary conditions that can be provided with appropriate planning and policies.
Conclusions and Suggestions
From the policy applications of this research, it is important to note that if the high growth of intellectual capital is to be fully effective in economic growth, there must be other conditions that are not entirely possible in the real world but can be Reduce this gap with proper planning and policies. Another important point is the importance of paying attention to the development and promotion of human capital to increase human resources productivity and the development of intellectual capital, which policymakers should consider. To improve the status of human capital, it is necessary to pay more attention to the development of skills and capabilities of the workforce at the beginning and during entry through rational investments in secondary and higher education and skills training. In conclusion, the discussion of intellectual capital, given that it is a new topic, has a very important and valuable role in individuals' prosperity, improving living standards and income, increasing knowledge and skills, production capacity, economic growth, and poverty reduction. It should be noted that the economic attitude to intellectual capital (on education and training) is very useful for the country's productivity and guarantees the country's success and economic progress.
 

Keywords

Intangible assets; Intellectual capital; System dynamics model

References

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