The relational side of intellectual capital: an empirical study on brand value evaluation and financial performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Enrico Laghi ◽  
Michele Di Marcantonio ◽  
Valentina Cillo ◽  
Niccolo Paoloni
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Brand Value ◽  
Relational Capital ◽  
Significant Information ◽  
Accounting Data ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Brands ◽  
Us Gaap

PurposeThis study aims to validate a direct method to measure relational capital through the estimation of corporate brands. Considering the influence of relational capital management in leading performance and brand development, we consider brand value as a proxy for relational capital. The main research goal is to extend the previous literature on intellectual capital, financial performance and brand management by elaborating and testing an original approach for valuating corporate brands using regression analysis on multiples based on firm-specific accounting data and market information.Design/methodology/approachThe authors propose two econometric models, for both listed and non-listed companies, which consider brand valuations made by primary consulting entities (Interbrand, Brand Finance, BrandZ, European Brand Institute) and multiples derived from accounting and market data of firms. Models were tested on a sample of nonfinancial firms for the period from 2006 to 2019, distinguishing between IAS/IFRS-based and US GAAP-based reporting standards.FindingsThe empirical results show that the identified set of market and accounting multiples proved to be significant information for estimating the value of brands within the IAS/IFRS framework, while a lower explanatory power was assessed for US GAAP firms. Furthermore, the empirical evidence confirm that the direct, relative approach based on multiples is more accurate for valuating listed firms than non-listed firms. Robustness analysis demonstrates that findings do not change significantly when the reference datasets and the main assumptions of the models are altered.Research limitations/implicationsThe statistical significance of the analysis is limited by the non-objective nature of brand value estimates. The use of additional sources for brand valuations might allow for the further assessment of the robustness of the relationships identified.Practical implicationsDue to their efficacy and ease of use, the proposed models represent valid practical tools for managers, investors, analysts and professional evaluators.Originality/valueThis work contributes to the existing literature through the identification of significant, stable relationships between brand values and the main economic, financial and asset characteristics of firms; the identification of those relationships would allow for the extension of the multiples approach also to the evaluation of brands.

Knowledge sharing, intellectual capital and firm performance

2014 ◽  
Vol 52 (2) ◽  
pp. 230-258 ◽  
Author(s):  
Zhining Wang ◽  
Nianxin Wang ◽  
Huigang Liang
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Operational Performance ◽  
Relational Capital ◽  
Research Model ◽  
Content Type ◽  
Technology Firms ◽  
High Technology Firms

Purpose – The aim of this paper is to investigate the impact of knowledge sharing (KS) on firm performance and the mediating role of intellectual capital (IC). Design/methodology/approach – A research model was developed based on prior KS and IC studies. A survey was administered to a sample of high technology firms in China and 228 usable responses were collected. Structural equation modeling (SEM) was employed to test the research model. Findings – Tacit KS significantly was found to contribute to all three components of IC, namely human, structural and relational capital, while explicit KS only has a significant influence on human and structural capital. Human, structural and relational capital, enhance both operational and financial performance of firms. The effect of KS on firm performance is mediated by IC. Explicit KS has a greater effect on financial performance than operational performance, whereas tacit KS has a greater impact on operational performance than financial performance. Research limitations/implications – The sample of high technology firms in China might limit the generalization of the findings. Nonetheless, this study takes its lead from and extends prior research, thus providing a deepened understanding of the role of KS in organizational settings. Practical implications – The paper suggests that managers can enhance firm performance by enhancing their KS and IC. Managers can develop corresponding strategies based on the findings to achieve their specific performance goals. Originality/value – This is one of the first papers to examine how KS contributes to firm performance through the mediation of IC. It will add significant value for organizations trying to enhance their performance though KS practices.

The relationship between intellectual capital, firms’ market value and financial performance

2015 ◽  
Vol 16 (3) ◽  
pp. 587-618 ◽  
Author(s):  
Sirinuch Nimtrakoon
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Value Added ◽  
Market Value ◽  
Relational Capital ◽  
Content Type ◽  
Capital Efficiency ◽  
Asean Countries ◽  
The Relationship

Purpose – The purpose of this paper is to explore and compare the extent of intellectual capital (IC) and its four components among ASEAN countries, and examine the relationship between firms’ IC, market value, and financial performance. Design/methodology/approach – The study uses the data of 213 technology firms listed on five ASEAN stock exchanges. Pulic’s Value Added Intellectual Coefficient model is modified by adding an extra component, namely, relational capital efficiency (RCE). The Kruskal-Wallis one-way ANOVA and multiple regression analysis have been utilized to test the hypotheses. Findings – The results reveal that there is no significant difference in Modified Value Added Intellectual Coefficient (MVAIC) across five ASEAN countries; however, firms in each country tend to place a different degree of emphasis on components of MVAIC to generate corporate value. The results further indicate a positive relationship between IC and market value, confirming that firms with greater IC tend to have greater market value. Likewise, a positive relationship between IC and financial performance measures is confirmed. Specifically, IC is found to be positively associated with margin ratio and return on assets. Capital employed efficiency and human capital efficiency are found to be the most influential value drivers for both market value and financial performance while structural capital efficiency and relational capital efficiency possess less importance. Originality/value – This study contributes to the IC literature by expanding our knowledge of IC in the emerging economies, and providing a national comparative IC research when such research is limited.

The role of intellectual capital in fostering SD-Orientation and firm performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Helena Alves ◽  
Ignacio Cepeda-Carrion ◽  
Jaime Ortega-Gutierrez ◽  
Bo Edvardsson
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Structural Equation ◽  
Great Influence ◽  
Relational Capital ◽  
Content Type ◽  
Service Oriented ◽  
And Performance ◽  
The Relationship

PurposeThis research aims to understand the relationship among Intellectual Capital (IC), Service Dominant Orientation (SD-Orientation) and firms performance.Design/methodology/approachA model conceptualizing the relationship among the three constructs was tested through structural equation modelling on a sample of 101 firms from SABI Spanish database.FindingsThe results confirm the influence of IC, in all of its dimensions, on SD-Orientation and of SD-orientation on performance. Furthermore, the results show that SD- Orientation fully mediates the relationship between IC and performance, except for relational capital that by itself also directly influences financial performance.Research limitations/implicationsData is limited to a sample of only one country and 101 services firms. Therefore, future studies should be carried out with samples from other countries.Practical implicationsThe main results show HC, relational capital and SC are a great influence and antecedent on SD-Orientation, therefore, as an implication, firms need to take care of the several components (human, structural and social) of IC in order to become more service oriented, something that will allow them to achieve a better performance.Originality/valueUntil know there was no other study testing the influence of IC on SD-Orientation, therefore this study contributes to understand SD-orientation and the necessary resources to operationalize it, including the links to financial performance.

Does environmental, social and governance performance influence intellectual capital disclosure tone in integrated reporting?

2019 ◽  
Vol 20 (1) ◽  
pp. 100-124 ◽  
Author(s):  
Valentina Beretta ◽  
Chiara Demartini ◽  
Sara Trucco
Keyword(s):  
Financial Performance ◽  
Impression Management ◽  
Intellectual Capital ◽  
Integrated Reporting ◽  
Content Type ◽  
Listed Firms ◽  
Incremental Information ◽  
Financial Disclosures ◽  
Disclosure Tone ◽  
Semantic Properties

Purpose The integrated reporting framework seeks to connect a firm’s financial and non-financial performance in a single report by displaying how different forms of capital contribute to the firm’s value creation. Drawing on impression management and incremental information approaches, the purpose of this paper is to examine how the content and semantic properties of intellectual capital disclosure (ICD) found in integrated reports is associated with firms’ performance. Design/methodology/approach All reports by European listed firms from 2011 to 2016 available via the integrated reporting emerging practice examples database are analysed. Content analysis is used to assesses the quality of ICDs, whereas a regression analysis tests the variation in semantic properties of ICDs according to firms’ performance. Findings ICDs in integrated reports are mainly discursive, with a backward looking orientation and a limited focus on human capital. On average, more than half of each ICD is conveyed in a positive tone. As the optimistic tone in firms’ ICDs increases, so too does their non-financial performance measured in terms of environmental, social and governance aspects. This finding supports the incremental information approach. Originality/value This paper contributes to the current literature on ICDs by introducing new evidence on firms’ motivations for non-financial disclosures in integrated reports. By taking a more comprehensive theoretical approach, namely, testing both impression management and incremental information hypotheses, this research extends on prior studies which tested similar relationships in integrated reports but focussed only on the impression management hypothesis.

Does female representation on corporate boards improve intellectual capital efficiency?

2019 ◽  
Vol 20 (5) ◽  
pp. 680-700 ◽  
Author(s):  
Muhammad Nadeem ◽  
Muhammad Bilal Farooq ◽  
Ammad Ahmed
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Gender Diversity ◽  
Value Added ◽  
Corporate Boards ◽  
Female Representation ◽  
Content Type ◽  
Listed Firms ◽  
Capital Efficiency ◽  
The Relationship

Purpose The purpose of this paper is to analyse the relationship between female representation on corporate boards and intellectual capital (IC) efficiency – while prior studies focus on the relationship between gender diversity and firms’ financial performance. Design/methodology/approach Drawing on data from top 500 UK listed firms for 2007–2016 (3,279 firm-years), this study employs an adjusted-value-added intellectual coefficient as a measure of IC efficiency. Further, the two-step system-generalised method of moments has been applied to account for endogeneity issues. Findings The results reveal a significant positive relationship between female representation on boards and IC efficiency, including human capital, structural/innovation capital and financial capital efficiency. These results are robust to alternative proxies for the independent variable and difference-in-difference estimation. Practical implications The results posit that female representation on boards is associated with IC efficiency, which is vital for firms’ value creation and competitive advantage in the knowledge-economy era. The study also endorses current legislation to increase female representation on corporate boards. Originality/value This is among the limited studies to explore the role of female representation on boards in IC efficiency – while most prior studies relate IC efficiency to financial performance.

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 in Ugandan service firms as mediator of board governance and firm performance

2014 ◽  
Vol 5 (3) ◽  
pp. 300-340 ◽  
Author(s):  
Stephen Korutaro Nkundabanyanga ◽  
Joseph M. Ntayi ◽  
Augustine Ahiauzu ◽  
Samuel K. Sejjaaka
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Predictor Variable ◽  
Mediating Effect ◽  
Board Governance ◽  
Content Type ◽  
Firm Financial Performance ◽  
Starting Point ◽  
The Relationship

Purpose – The purpose of this paper is to examine the mediating effect of intellectual capital on the relationship between board governance and perceived firm financial performance. Design/methodology/approach – This study was cross-sectional. Analyses were by SPSS and Analysis of Moment Structure on a sample of 128 firms. Findings – The mediated model provides support for the hypothesis that intellectual capital mediates the relationship between board governance and perceived firm performance. while the direct relationship between board governance and firm financial performance without the mediation effect of intellectual capital was found to be significant, this relationship becomes insignificant when mediation of intellectual capital is allowed. Thus, the entire effect does not only go through the main hypothesised predictor variable (board governance) but majorly also, through intellectual capital. Accordingly, the connection between board governance and firm financial performance is very much weakened by the presence of intellectual capital in the model – confirming that the presence of intellectual capital significantly acts as a conduit in the association between board governance and firm financial performance. Overall, 36 per cent of the variance in perceived firm performance is explained. the error variance being 64 per cent of perceived firm performance itself. Research limitations/implications – The authors surveyed directors or managers of firms and although the influence of common methods variance was minimal, the non-existence of common methods bias could not be guaranteed. Although the constructs have been defined as precisely as possible by drawing upon relevant literature and theory, the measurements used may not perfectly represent all the dimensions. For example board governance concept (used here as a behavioural concept) is very much in its infancy just as intellectual capital is. Similarly the authors have employed perceived firm financial performance as proxy for firm financial performance. The implication is that the constructs used/developed can realistically only be proxies for an underlying latent phenomenon that itself is not fully measureable. Practical implications – In considering the behavioural constructs of the board, a new integrative framework for board effectiveness is much needed as a starting point, followed by examining intellectual capital in firms whose mediating effect should formally be accounted for in the board governance – financial performance equation. Originality/value – Results add to the conceptual improvement in board governance studies and lend considerable support for the behavioural perspective in the study of boards and their firm performance improvement potential. Using qualitative factors for intellectual capital to predict the perceived firm financial performance, this study offers a unique dimension in understanding the causes of poor financial performance. It is always a sign of a maturing discipline (like corporate governance) to examine the role of a third variable in the relationship so as to make meaningful conclusions.

Intellectual capital and knowledge generation: an empirical study from Colombian public universities

2020 ◽  
Vol 21 (6) ◽  
pp. 1053-1084
Author(s):  
John Salinas-Ávila ◽  
René Abreu-Ledón ◽  
Johnny Tamayo-Arias
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Structural Equation ◽  
Online Survey ◽  
Public Universities ◽  
Knowledge Generation ◽  
Equation Modeling ◽  
Relational Capital ◽  
Content Type ◽  
Structural Capital

PurposeThe purpose of this paper is to provide empirical evidence on the relationships between the dimensions of intellectual capital (IC) and the generation of knowledge in public universities.Design/methodology/approachAn online survey was developed and administered in Colombia. A total of 209 researchers participated in the study. Data were collected through IC measurements concerning the research mission of the universities. Scientific publications from the respondents and the citations received were taken as proxies for the generation of knowledge. To test the hypotheses, structural equation modeling was used.FindingsHypotheses proposing a positive association between the dimensions of IC, namely, human capital, structural capital, and relational capital, and the generation of knowledge were tested. The findings highlight that human capital is indirectly and positively related to the generation of knowledge through relational capital, as well as through the path of structural capital-relational capital.Practical implicationsThe study suggests that directors of research at universities could improve the results of this activity by analyzing and understanding the dimensions of IC that contribute to the development of scientific capacities and the generation of knowledge.Originality/valueThis is one of the first studies that has examined the interrelationships between the dimensions of IC at universities and the generation of knowledge.

The relationship between corporate governance and intellectual capital

2019 ◽  
Vol 61 (2) ◽  
pp. 384-401 ◽  
Author(s):  
Amina Buallay ◽  
Allam Hamdan
Keyword(s):  
Corporate Governance ◽  
Firm Size ◽  
Intellectual Capital ◽  
Content Type ◽  
Listed Firms ◽  
Pooled Data ◽  
Structural Capital ◽  
Capital Efficiency ◽  
High Level ◽  
The Relationship

Purpose The purpose of this study is to examine the moderating role of firm size on the relationship between corporate governance (CG) and intellectual capital (IC) efficiency. Design/methodology/approach The methodology was a pooled data for three years (2012-2014) for 171 listed firms, resulting in 489 observations. Findings The findings revealed that the inclusion of firm size as a moderating variable has influenced positively only the relationship between CG principles and capital employed efficiency (CEE). Further, the finding showed that the two IC components namely, human capital efficiency and structural capital efficiency, tend to be higher with firms that high level of CG adoption. However, CEE tends to be higher with firms that have lower level of CG adoption. Other finding shows that CG index was significant with the three IC components. Originality/value Such information will help the stakeholders, investors, decision-makers, regulators, policymakers and scholars to improve their knowledge about IC. Furthermore, it will be useful for firms to place their priorities regarding the internal system and financial plans for effective and efficient use of CG and IC.

The effects of self-reflection on individual intellectual capital

2020 ◽  
Vol 21 (6) ◽  
pp. 1107-1124
Author(s):  
Zhining Wang ◽  
Shaohan Cai ◽  
Mengli Liu ◽  
Dandan liu ◽  
Lijun Meng
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Equation Modeling ◽  
Relational Capital ◽  
Content Type ◽  
Self Reflection ◽  
Structural Capital ◽  
The Relationship ◽  
Individual Human ◽  
Three Components

PurposeThe aim of this paper is to develop a tool measuring individual intellectual capital (IIC) and investigate the relationship between self-reflection and IIC.Design/methodology/approachThis study developed a theoretical model based on social cognitive theory and the literature of self-reflection and intellectual capital (IC). This research collected responses from 502 dyads of employees and their direct supervisors in 150 firms in China, and the study tested the research model using structural equation modeling (SEM).FindingsThe results indicate that three components of self-reflection, namely, need for self-reflection, engagement in self-reflection and insight, significantly contribute to all the three components of IIC, such as individual human capital, individual structural capital and individual relational capital. The findings suggest that need for self-reflection is the weakest component to impact individual human capital and individual relationship capital, while insight is the one that mostly enhances individual structural capital.Practical implicationsThis paper suggests that managers can enhance employees' IIC by facilitating their self-reflection. Managers can develop appropriate strategies based on findings of this study, to achieve their specific goals.Originality/valueFirst, this study develops a tool for measuring IIC. Second, this study provides an enriched theoretical explanation on the relationship between self-reflection and IIC – by showing that the three subdimensions of self-reflection, such as need, engagement and insight, influence the three subdimensions of IIC, such as individual human capital, individual structural capital and individual relational capital.

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