Abstract:

This study aims to examine the relationship between intellectual capital and profitability in the pre-COVID-19 period and its change during the pandemic, focusing on Slovak small and medium enterprises (SMEs). The novelty of this study is the analyses of the crisis period conducted on a sector level via linear mixed-effects models in a Central and Eastern European country. The data sample consisted of 24,351 Slovak small and medium enterprises. This study assumes a positive relationship between profitability and company size, age, capital employed efficiency, and structural and human capital efficiency during the pre-COVID-19 year. Companies with higher value-added intellectual coefficient (VAIC) scores achieved higher values of profitability in both return on assets (ROA) and return on equity (ROE). The results also show that structured capital and capital employed efficiencies negatively impacted company profitability during 2020. On a sector level, the pandemic hit the following sectors the most: tourism and gastronomy and gambling due to various restrictions and closures.

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