Value creation through intellectual capital in developed European markets

2014 ◽  
Vol 41 (2) ◽  
pp. 272-291 ◽  
Author(s):  
Elena Shakina ◽  
Angel Barajas
Keyword(s):  
Production Function ◽  
Intellectual Capital ◽  
Value Creation ◽  
Research Question ◽  
Intangible Capital ◽  
Future Research ◽  
Content Type ◽  
Log Linear ◽  
European Markets ◽  
Hedonic Approach

Purpose – This paper aims to investigate the production function of firms based on the use of intellectual capital. The authors come up with this problem since believe that the new economy conditions require an adjustment and a development of classical firm theory. Design/methodology/approach – The research question addressed in this study is mainly related to the empirical validation of the function based on companies' intangibles in the Cobb-Douglas framework. This model enables the authors to advocate the idea of the complementarity of intellectual resources as well as simplifies the analysis of intellectual capital features. To accomplish the purpose of the research, the authors design a log-linear model and estimate it on a sample of more than 400 European and American companies. Findings – Application of Cobb-Douglas framework allowed designing a production function based on intellectual capital. The complementarity of intellectual capital components is justified on the empirical results obtained in this research. The increasing return to scale for intellectual capital was established for the sample examined in this study. Research limitations/implications – The main shortcoming of the approach implemented in this study is related to the proxy indicators of intellectual capital. Nevertheless, the authors statistically validate the chosen indicators applying hedonic approach. Practical implications – Practical accomplishment of this research is mainly associated with the conclusion about an increasing return to scale of intellectual capital. This phenomenon appears to be of a particular importance for investment decisions. Originality/value – The findings of this paper provide a new insight into intellectual resources interrelation that enhances companies' value creation. The authors also hope to assist future research attempts in application of the theory of company's growth driven by its intangible capital.

Voluntary disclosure and intellectual capital: how CEOs mobilise discretionary accounting narratives to account for value creation stemming from intellectual capital

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Elisabeth Albertini ◽  
Fabienne Berger-Remy ◽  
Stephane Lefrancq ◽  
Laurence Morgana ◽  
Miloš Petković ◽  
...  
Keyword(s):  
Intellectual Capital ◽  
Value Creation ◽  
Voluntary Disclosure ◽  
Research Question ◽  
Balance Sheet ◽  
Content Type ◽  
Customer Capital ◽  
The Media ◽  
Environmental Capital ◽  
Required Disclosures

PurposeThis research aims to contribute to the current discussion led by international accounting bodies on intellectual capital narratives. Before setting a standard, a preliminary step is to highlight intellectual capital components' sources of value. The objective of this exploratory paper is to contribute to the discussion by proposing a detailed description and taxonomy of intellectual capital based on an analysis of discretionary accounting narrative disclosures in CEO letters.Design/methodology/approachTo answer the research question, a computerised lexical content analysis was done of 241 letters from the CEOs of S&P Euro 350 companies addressed to shareholders.FindingsBeyond the required disclosures about balance sheet intangibles, this study brings to light discretionary narratives about human, digital, customer and environmental capital and their interactions. In particular, CEOs are promoting two new themes, environmental capital and digital capital, as major contributors to value creation.Research limitations/implicationsThe limitations of this study are inherent in the media studied, namely the CEOs' letters to shareholders, which were written as part of the firms' official communication.Practical implicationsThe main contribution of the research is a detailed description of the intellectual capital components that CEOs consider to be at the heart of their companies' models to create value. Human and customer capital were already familiar under the previous classification, but CEOs present digital and environmental capital as areas of opportunity or risk in their discretionary narratives.Originality/valueThe article contributes to the current international discussions on intellectual capital by focusing on discretionary accounting narratives. It seeks to provide guidelines concerning future standards in the current stage of intellectual capital research.

scholarly journals Transforming the stakeholders’ Big Data for intellectual capital management

2018 ◽  
Vol 26 (3) ◽  
pp. 420-442 ◽  
Author(s):  
Lorna Uden ◽  
Pasquale Del Vecchio
Keyword(s):  
Big Data ◽  
Conceptual Framework ◽  
Activity Theory ◽  
Intellectual Capital ◽  
Value Creation ◽  
Organizational Values ◽  
Service Science ◽  
Future Research ◽  
Content Type ◽  
Service Ecosystems

PurposeThis paper aims to define a conceptual framework for transforming Big Data into organizational value by focussing on the perspectives of service science and activity theory. In coherence with the agenda on evolutionary research on intellectual capital (IC), the study also provides momentum for researchers and scholars to explore emerging trends and implications of Big Data for IC management.Design/methodology/approachThe paper adopts a qualitative and integrated research method based on a constructive review of existing literature related to IC management, Big Data, service science and activity theory to identify features and processes of a conceptual framework emerging at the intersection of previously identified research topics.FindingsThe proposed framework harnesses the power of Big Data, collectively created by the engagement of multiple stakeholders based on the concepts of service ecosystems, by using activity theory. The transformation of Big Data for IC management addresses the process of value creation based on a set of critical dimensions useful to identify goals, main actors and stakeholders, processes and motivations.Research limitations/implicationsThe paper indicates how organizational values can be created from Big Data through the co-creation of value in service ecosystems. Activity theory is used as theoretical lens to support IC ecosystem development. This research is exploratory; the framework offers opportunities for refinement and can be used to spearhead directions for future research.Practical implicationsThe paper proposes a framework for transforming Big Data into organizational values for IC management in the context of entrepreneurial universities as pivotal contexts of observation that can be replicated in different fields. The framework provides guidelines that can be used to help organizations intending to embark on the emerging paradigm of Big Data for IC management for their competitive advantages.Originality/valueThe paper’s originality is in bringing together research from Big Data, value co-creation from service ecosystems and activity theory to address the complex issues involved in IC management. A further element of originality offered involves integrating such multidisciplinary perspectives as a lens for shaping the complex process of value creation from Big Data in relationship to IC management. The concept of how IC ecosystems can be designed is also introduced.

Visualizing intellectual capital using service-dominant logic

2017 ◽  
Vol 29 (6) ◽  
pp. 1745-1768 ◽  
Author(s):  
Janet Davey ◽  
Rachael Alsemgeest ◽  
Samuel O’Reilly-Schwass ◽  
Howard Davey ◽  
Mary FitzPatrick
Keyword(s):  
Competitive Advantage ◽  
Intellectual Capital ◽  
Value Creation ◽  
Hotel Industry ◽  
Annual Reports ◽  
Future Research ◽  
Research Approach ◽  
Content Type ◽  
Reporting Practices ◽  
Operant Resources

Purpose The purpose of this paper is to investigate intellectual capital (IC) reporting, from a service-centric approach, in the hotel industry. The strategic enhancement of value-creation and sustainable competitive advantage requires both management and measurement. Sound measurement and reporting practices enable management performance to be judged; one such practice is IC disclosure. Service-dominant (S-D) logic emphasizes that intangible operant resources, the foundation of IC, are at the core of competitive advantage. Design/methodology/approach A disclosure instrument based on S-D logic and designed specifically for the hotel industry was applied to the annual reports and sustainability reports (in English) of 30 Asian hotel companies. Content analysis measured the disclosures of dynamic IC assets typically overlooked by traditional IC disclosure instruments. Findings The majority of IC communication concerns lower-order basic operant resources. Although more than one-third of the companies’ disclosures of IC assets relate to collaborative processes and practices that support networked value-creation, most disclosures demonstrate a prevailing firm-centric orientation. IC items regarding reciprocated relationship and informational management were minimally reported. Research limitations/implications A single research approach was used. Future research could use other communication channels to triangulate. Practical implications The results highlight opportunities for hotel companies to better report their IC assets as part of their value-creating strategies. Originality/value This research is one of the first to operationalize S-D logic concerning IC. It provides a promising framework for understanding IC reporting in the hotel industry.

scholarly journals Intellectual capital reporting, leadership and strategic change

2016 ◽  
Vol 17 (1) ◽  
pp. 61-83 ◽  
Author(s):  
Richard Slack ◽  
Matthias Munz
Keyword(s):  
Intellectual Capital ◽  
Value Creation ◽  
Corporate Strategy ◽  
Annual Report ◽  
Strategic Change ◽  
Annual Reports ◽  
Future Research ◽  
Integrated Reporting ◽  
Leadership Change ◽  
Content Type

Purpose – A change in leadership can signal a shift in corporate strategy to drive future value creation. To help achieve this, a different emphasis may be placed upon the intellectual capital (IC) resources within the organisation. The purpose of this paper is to examine the changes in volume, composition and emphasis of IC disclosure in annual reports mapped against the re-orientation of corporate strategy and associated leadership change. Design/methodology/approach – A longitudinal period of over three decades (1979-2010) is examined. Adopting a case-based approach, Daimler AG is purposively selected for this research having a number of distinct changes in strategy over the period, reflective of leadership change. Using content analysis, annual report IC-related disclosures (structural, relational and human capital) by Daimler AG are examined, by category and more detailed sub-categories, against corporate strategy. Findings – The composition and emphasis of IC disclosures found in the annual reports changes over the longitudinal period and is reflective of the prevailing corporate strategy at that time. There were four identified periods of strategy, each associated with leadership change. The prevalence and qualitative focus of IC disclosures relevant to each period reflects the importance of respective IC components in corporate value creation. Research limitations/implications – The research is based on annual report IC disclosures within one case company and hence reflect the messages conveyed by that company over the longitudinal period. Additionally, the authors recognise that the annual report is only one source of corporate information, but as a historic record it serves to consistently capture management disclosure over a long-time period. Future research, adopting an econometric approach, could further test the linkages between leadership change, strategic shift and IC-related disclosure. Practical implications – The research reveals how IC-related disclosure shifts to reflect leadership and strategic change within a case company. Through such disclosure, the authors are able to gain greater insight into how a specific business seeks to create value drawing on the components of IC underpinning corporate strategy. Originality/value – The research provides new insights into IC disclosure by mapping its content and emphasis against changes in corporate strategy. This has contemporary significance due to the wider disclosure debate concerning strategy and value creation in the annual report, for instance through integrated reporting. Further, the research shows the value of annual reports for longitudinal disclosure research.

scholarly journals Intangible-driven value creation: supporting and obstructing factors

2014 ◽  
Vol 18 (3) ◽  
pp. 87-100 ◽  
Author(s):  
Elena Shakina ◽  
Mariya Molodchik
Keyword(s):  
Value Creation ◽  
Investment Decision ◽  
Economic Value ◽  
Value Added ◽  
Market Value ◽  
Intangible Capital ◽  
Future Research ◽  
Unexpected Result ◽  
Content Type ◽  
The Impact

Purpose – This study aims to investigate the factors that support or obstruct market value creation through intangible capital. Design/methodology/approach – The paper explores the impact of intangibles and exogenous shocks on corporate attractiveness for investors measured by market value added. Specifically, the relationship between intangible-driven outperformance of companies, measured by economic value added (EVA) and a number of intangible drivers on macro-, meso- and micro-levels is analyzed. It is supposed that the process of value creation is not only confined to companies’ performances. The empirical research was conducted on > 900 public companies from Europe and the USA during the period of 2005-2009. Findings – The study establishes that investment attractiveness is affected by intangibles. It is found that a company’s experience, size and innovative focus facilitate value creation. An unexpected result was revealed concerning countries’ education level, which appears to be an obstructive condition for intangible-driven value creation. Research limitations/implications – The study reveals the significance of industry belonging for intangible-driven value creation. Nevertheless, it does not discover the particular characteristics of industry that influence corporate attractiveness for investors. These issues could be addressed in future research. Practical implications – The findings established in this study extend the understanding of the phenomenon of intangible capital and enable the improvement of investment decision-making. Originality/value – The study emphasizes the holistic framework of market value creation by analyzing a number of strategic crucial factors in line with EVA.

Managers’ views on how intellectual capital is recognized and managed in practice

2019 ◽  
Vol 20 (2) ◽  
pp. 282-304 ◽  
Author(s):  
Daniel Tyskbo
Keyword(s):  
Intellectual Capital ◽  
Research Question ◽  
Multiple Case Study ◽  
Sample Survey ◽  
Future Research ◽  
Financial Reports ◽  
Content Type ◽  
Multiple Case ◽  
The Rich

Purpose The purpose of this paper is to advance the understanding of how intellectual capital (IC) unfolds in practice in organizations. This is done by answering the research question of how IC is recognized and managed in practice as expressed by managers. Design/methodology/approach An explorative, empirical and multiple case study was conducted, investigating four Swedish firms. Findings This paper illustrates how IC was recognized and managed in practice despite managers expressing uncertainty of what the IC concept means. More or less direct, formalized and purposeful ways were adopted. The IC elements and practices most important from a management perspective were those aligned with the overall strategy, but were seldom what was visible in financial reports. Research limitations/implications The use of an explorative, multiple case study limits the generalizability. However, the rich view gained of how IC unfolds in practice may not always be possible using large sample, survey-studies. Future research is therefore suggested to take this paper’s insights further and investigate IC in other organizations and in other national contexts. Originality/value This paper responds to the calls for third stage IC research, by showing how IC management in practice may not be as clear and straightforward as researchers tend to assume. It also adds to the importance debate on IC accountingization, by reflecting on how an accounting dominance may not fully capture IC inside organizations. A number of practical contributions are also made.

Rome wasn’t built in a day … reflecting on time, intellectual capital and intellectual liabilities

2015 ◽  
Vol 16 (1) ◽  
pp. 2-19 ◽  
Author(s):  
Marco Giuliani
Keyword(s):  
Field Study ◽  
Intellectual Capital ◽  
Value Creation ◽  
Research Question ◽  
Theoretical Perspective ◽  
Time Lags ◽  
Time Dimension ◽  
Negative Effects ◽  
Content Type ◽  
Dynamic Perspective

Purpose – The purpose of this paper is to analyse, through a temporal lens and from a managerial perspective, the role played by intellectual capital (IC) and intellectual liabilities (ILs) “in practice” within the value creation and value destruction processes. In particular, this study is based on the following research question: to what extent are time and its attributes considered, measured, and discussed with reference to IC and ILs and their influence on financial capital (FC)? In order to achieve this purpose, the author has carried out a field study. Design/methodology/approach – A field study method is adopted in order to understand IC and ILs “in action” from a temporal perspective. Findings – This study highlights the relevance of time when IC and ILs are analysed from a dynamic perspective. In particular, the main findings are the following. First, it emerges that the time dimension of IC tends not to be measured due to the complexity of IC itself and to the lack of adequate accounting practices. Second, IC time is generally considered to be non-cyclical and random. Third, even if time is not measured, some companies talk about it and when this is done with regularity, time perceptions move from an individual sphere to a collective one and they become more and more reliable. Moreover, IC performance is perceived to be “distant” from FC performance: the succession of events and the time lags are difficult to define and quantify as the influence of IC on FC is mediated by several resources and events. Lastly, the value destruction process related to ILs tends to generate negative effects faster than the value creation one, especially with reference to the impacts of IC on FC. Research limitations/implications – The main limitations of this study are twofold. The first is related to the methodology adopted and the related risks that the results may be subject to both interviewee and interviewer bias and interpretation. The second is related to the fact that the constructs to be discussed were not proposed by the firms but by the author, in order to make the results comparable. Practical implications – This study contributes to the literature on IC and ILs “in action” and “in practice”. Moreover, this study enriches the extant IC and ILs literature focusing on time, a variable that is generally assumed to be a natural unchangeable phenomenon that does not deserve attention. In particular, the findings highlight the different behaviours and perceptions that occur when IC and ILs are looked at through a temporal lens. Finally, this study pinpoints that value creation and value destruction processes seem to have different timings as it takes more time to create value than to destroy it. Originality/value – In comparison to previous studies, this study does not focus on the positive and negative effects of IC separately, but combines the two issues, also comparing the value creation and the value destruction processes in order to offer a complete picture. Moreover, it adopts a temporal lens, which has been applied only with reference to IC but not to ILs as well. Finally, while the extant literature on ILs tends to investigate them from a theoretical perspective and adopting a static approach, this research investigates ILs empirically from a dynamic perspective.

The impact of intellectual capital on firm performance: a study of Indian firms listed in COSPI

2018 ◽  
Vol 19 (5) ◽  
pp. 935-964 ◽  
Author(s):  
Neha Smriti ◽  
Niladri Das
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Value Creation ◽  
Generalized Method Of Moments ◽  
Value Added ◽  
Secondary Data ◽  
Share Price ◽  
Content Type ◽  
Listed Firms ◽  
The Impact

Purpose The purpose of this paper is to examine the effect of intellectual capital (IC) on financial performance (FP) for Indian companies listed on the Centre for Monitoring Indian Economy Overall Share Price Index (COSPI). Design/methodology/approach Hypotheses were developed according to theories and literature review. Secondary data were collected from Indian companies listed on the COSPI between 2001 and 2016, and the value-added intellectual coefficient (VAIC) of Pulic (2000) was used to measure IC and its components. A dynamic system generalized method of moments (SGMM) estimator was employed to identify the variables that significantly contribute to firm performance. Findings Indian listed firms appear to be performing well and efficiently utilizing their IC. Overall, human capital had a major impact on firm productivity during the study period. Furthermore, the empirical analysis showed that structural capital efficiency and capital employed efficiency were equally important contributors to firm’s sales growth and market value. The growing importance of the contribution of IC to value creation was consistently reflected in the FP of these Indian companies. Practical implications This study has robust theoretical grounds and employs a validated methodology. The present study extends knowledge of IC among academicians and managers and highlights its contribution to value creation. The findings may help stakeholders and policymakers in developing countries properly reallocate intellectual resources. Originality/value This study is the first study to evaluate IC and its relationship with traditional measures of firm performance among Indian listed firms using dynamic SGMM and VAIC models.

Intellectual capital disclosure on Twitter – empirical evidence from the world’s largest companies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Łukasz Bryl ◽  
Justyna Fijałkowska ◽  
Dominika Hadro
Keyword(s):  
Social Media ◽  
Intellectual Capital ◽  
Recent Literature ◽  
Future Research ◽  
Corporate Disclosure ◽  
Content Type ◽  
Management Philosophy ◽  
Business Units ◽  
Structural Capital ◽  
Practical Implications

Purpose This study aims to examine intellectual capital disclosure (ICD) on Twitter by 60 of the world’s largest companies and explains the main themes communicated to stakeholders. The second objective is to determine which topics provoke most stakeholders’ reactions. Design/methodology/approach The authors perform content analysis on more than 42,000 tweets to examine ICD practices along with the reactions of stakeholders in the form of retweets and “favorites” toward the information disclosed. Findings Intellectual capital (IC) is an important theme in corporate disclosure practices, as more than one-third of the published tweets refer to IC. The world’s largest companies focus on relational capital information, followed by human and structural capital. The main IC themes disclosed were management philosophy, corporate reputation and business partnering. Tweets related to IC are of greater interest to stakeholders than other tweets and provoke more reactions. There is no complete consistency between the topics most intensively disclosed by companies and those that elicit the most vivid responses from the addressees. Practical implications This study offers an understanding of the world’s largest companies’ practices that refer to ICD via social media and has implications for organizations in the creation and use of communication channels when developing a dialogue with stakeholders on topics regarding IC that may lead to better management of IC performance. Originality/value This paper is a response to the call for studies on ICD via social media, which is strongly highlighted in the recent literature concerning future research on IC and until now was almost absent in the field of business units. This research provides in-depth insights into the use of Twitter to disclose IC elements and indicates which fields and topics of this disclosure provoke stakeholders’ reactions, which is a novelty in ICD studies.

The value creation logic and the internationalisation of internet firms

2016 ◽  
Vol 26 (3) ◽  
pp. 349-370 ◽  
Author(s):  
Denitsa Blagoeva Hazarbassanova
Keyword(s):  
Value Creation ◽  
Research Question ◽  
International Strategy ◽  
Service Firms ◽  
Content Type ◽  
Digital Service ◽  
Internet Firms ◽  
Value Propositions ◽  
Value Creation Process ◽  
Practical Implications

Purpose The purpose of the research is to put to a test the belief that the idiosyncratic internationalisation process of Internet firms is homogeneous. The research question is thus, “How does the value creation logic of Internet firms influence their internationalisation process?”. Design/methodology/approach The authors answer this question using three cases illustrating the internationalisation process of three pure play digital service firms, each falling into one value creation logic. Findings Each case company had a different approach to internationalisation, explained by a different theory. The firms differed in what their motivation was to internationalise, how they dealt with their liability of foreignness and how they learnt to internationalise. The differences were consistent with the specificities of their value creation. The contribution of this paper is to take the first steps towards linking the way firms create value with their internationalisation. What theory best explains the internationalization of IFs seems contingent on what firms do. Practical implications The message to practitioners is that international strategy not only can but also needs to be different across firms. It needs to be tailored to the concrete way a firm endeavours to generate and capture value. “One strategy fits most” is unlikely to succeed, because different value propositions demand different approaches to realising them. Originality/value In extant literature, IFs have been treated as one group, albeit distinct from “offline” firms. This paper proposes that the value creation process of IFs causes them to differ from each other, just as much as they differ from traditional firms.

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