Why do firms measure their intellectual capital?

It is now generally believed, within the current literature, that an academic and practitioner focus on intellectual capital (IC) is important and that the measurement of a company's intangibles provides real business benefits. However, it is essential for researchers in the field of IC to be able to justify these newly formed theoretical assumptions through rigorous empirical testing. This paper reports on the results of a systematic investigation into the theoretical underpinnings of why firms measure their IC and existing empirical evidence that helps to prove that the measurement of IC is really worthwhile. The paper then critically reviews the state of research evidence in the field. The major finding of this paper is that the majority of research within the IC measurement field is at the theory building stage, and that very little of the proposed measurement theory has yet been fully tested. This paper outlines possible avenues scholars might pursue in order to further the development of the IC measurement field.