Intellectual capital and financial performance in the Serbian ICT industry

2016 ◽  
Vol 17 (2) ◽  
pp. 373-396 ◽  
Author(s):  
Vladimir Dženopoljac ◽  
Stevo Janoševic ◽  
Nick Bontis
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Value Creation ◽  
Value Added ◽  
Physical Capital ◽  
Content Type ◽  
Main Research ◽  
Ict Industry ◽  
The Impact ◽  
Ict Companies

Purpose – The purpose of this paper is to examine whether intellectual capital (IC) creates value in the Serbian information communication technology (ICT) sector. More specifically, it examines the degree to which IC and its key components affect the financial performance of selected ICT companies compared to effects on physical and financial capital. Design/methodology/approach – The analysis included 13,989 Serbian ICT companies during 2009-2013. Value-added intellectual coefficient (VAIC) was used to measure the level of IC contribution to value creation. Measures of financial performance used in the study were return on equity, return on assets, return on invested capital, profitability, and asset turnover. Findings – Results indicate that, when using firm size and leverage as control variables, only capital-employed efficiency has significant effect on financial performance. Finally, the research confirms that there were no significant differences in financial performance among different ICT subsectors. Research limitations/implications – Main research limitation is related to the disadvantages of VAIC as the measure of IC’s contribution to value creation. Practical implications – Owners and managers of Serbian ICT companies must recognize the importance of managing both the physical capital and the intangible resources embedded in their employees and processes. Originality/value – This is the first paper to examine comprehensively the impact of IC on financial performance in the ICT sector in a transitional economy. This study differs from prior studies in that the authors analyzed every company that operated in Serbian ICT sector.

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.

scholarly journals The association between intellectual capital and financial performance in the Islamic banking industry

2019 ◽  
Vol 13 (1) ◽  
pp. 75-93 ◽  
Author(s):  
A.A. Ousama ◽  
Helmi Hammami ◽  
Mustafa Abdulkarim
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Impact ◽  
Value Added ◽  
Annual Reports ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Gcc Countries ◽  
The Impact

Purpose The purpose of this study is to empirically investigate the impact of intellectual capital (IC) on the financial performance of Islamic banks operating in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach The study measures IC by the value added intellectual coefficient model. A regression analysis was used to assess the impact of IC on financial performance. The research sample consisted of Islamic banks operating in the GCC countries during the years 2011, 2012 and 2013. Data originated from the annual reports of Islamic banks. Findings The results support the thesis that IC has a positive impact on the financial performance of Islamic banks. Even though the average IC is lower than that reported in other studies, the positive effect on financial performance is obvious. The findings also show that human capital (HC) is higher than capital employed (CE) and structural capital (SC). The study reveals that SC has an insignificant impact on the financial performance of the Islamic banks compared to CE and HC. Practical implications The findings provide empirical evidence that IC affects the Islamic banks’ financial performance. It helps Islamic banks in the GCC countries to understand how to use their IC efficiently, especially SC as it is yet to be used efficiently. Also, the findings benefit the relevant authorities (e.g. legislators and central banks) who could use them to emphasise strategic policy reforms whenever required. Originality/value The current research adds to the empirical studies in the GCC countries as it views the region as a collective as opposed to individual countries. It also extends the IC and performance measurement literature of Islamic banks in the GCC countries. Moreover, the current study enriches the limited literature on IC in the context of Islamic banking.

Impact of intellectual capital on corporate performance: evidence from the Arab region

2017 ◽  
Vol 18 (4) ◽  
pp. 884-903 ◽  
Author(s):  
Vladimir Dzenopoljac ◽  
Chadi Yaacoub ◽  
Nasser Elkanj ◽  
Nick Bontis
Keyword(s):  
Intellectual Capital ◽  
Corporate Performance ◽  
Market Performance ◽  
Value Added ◽  
Physical Capital ◽  
Publicly Traded ◽  
Content Type ◽  
Capital Efficiency ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is twofold: first, to fill a gap in the intellectual capital (IC) literature by providing insights into the relationship between IC and corporate performance among Arab companies and second, to challenge the validity of the Value Added Intellectual Coefficient (VAIC) as a measure of IC’s contribution to performance. Design/methodology/approach The research sample included 100 publicly traded Arab companies selected by Forbes Middle East and ranked as top performers in terms of sales, profits, assets, and market value. The methodology included assessing the impact of IC components on company earnings, profitability, efficiency, and market performance for the period between 2011 and 2015. Research hypotheses were tested through the presentation of descriptive statistics, normality tests, correlation matrix, and multiple regression models. Findings The research yielded ambiguous results. Earnings and profitability were significantly affected by structural and physical capital; efficiency was determined primarily by physical capital; and market performance was mainly influenced by human capital. Research limitations/implications The main limitation of the research comes from disadvantages of VAIC as the measure of IC’s contributions to performance. Originality/value The paper fills a void in the study of IC and corporate performance among Arab companies.

Intellectual capital efficiency and bank’s performance

2019 ◽  
Vol 31 (4) ◽  
pp. 672-694 ◽  
Author(s):  
Amina Buallay ◽  
Richard Cummings ◽  
Allam Hamdan
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Market Performance ◽  
Value Added ◽  
High Tech ◽  
Islamic Banks ◽  
Content Type ◽  
Conventional Banks ◽  
The Impact

Purpose Intellectual capital (IC) plays a pivotal role in the high-tech and knowledge-based economic sectors. With the emergence of FinTech, which, with respect to the banking sector, is merging high-tech with the k-economy, there is an emerging need to highlight the importance and understand the dynamics of bank IC. With respect to Gulf Cooperation Council (GCC) economies, where FinTech has become de rigueur, banking is bifurcated into Islamic and banking sectors. Through comparative empirical analysis, the purpose of this paper is to examine IC efficiency in Islamic and conventional banks with a view to elucidating the impact of IC, in aggregate and decomposed into its components, on an operational, financial and market performance of Islamic banks juxtaposed with conventional banks. Design/methodology/approach Using data collected from 59 banks for five years (2012-2016) involving 295 observations, an independent variable derived from the modified value added IC (MVAIC) components are regressed against dependent bank performance indicator variables [Return on Assets (ROA), Return on Equity (ROE) and Tobin’s Q (TQ)]. Two types of control variables complete the regression analysis in this study: bank-specific and macroeconomic. Findings The findings elicited from the empirical results demonstrate that there is positive relationship between IC efficiency and financial performance (ROE) and market performance (TQ) in Islamic banks. In conventional banks, however, there is a positive relationship between IC and operational performance (ROE) and financial performance (ROE). Originality/value The model in this paper presents a valuable analytical framework for exploring IC efficiency as a driver of performance in dual-sector banking economies characterized by co-existence of Islamic and conventional financial institutions. In addition, this paper highlights bank management lacunae manifesting in terms of the weak nexus between: IC and asset efficiency (ROA) in Islamic banks and IC and market value (TQ) in conventional banks.

scholarly journals Determinants of financial performance of Islamic banks: an intellectual capital perspective

2017 ◽  
Vol 8 (2) ◽  
pp. 130-142 ◽  
Author(s):  
Tasawar Nawaz ◽  
Roszaini Haniffa
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Value Added ◽  
Annual Reports ◽  
Content Type ◽  
Significant Positive Relationship ◽  
Accounting Performance ◽  
Capital Efficiency ◽  
The Impact

Purpose The purpose of this paper is to empirically examine the effect of intangible resources, i.e. intellectual capital (IC) on financial performance of 64 Islamic financial institutions (IFIs) operating in 18 different countries for the period 2007-2011, while controlling for firm-specific variables, namely, bank size, level of risk, listing status, and firm complexity. Design/methodology/approach The required data to calculate different constituents of IC are derived from Bankscope database. Value Added Intellectual Coefficient (VAIC) methodology devised by Pulic is used to determine the impact of IC on financial performance of IFIs. Findings Results indicate a significant positive relationship between VAIC and accounting performance based on return on assets (ROA). The results further indicate a significant positive relationship between accounting performance and capital employed efficiency (CEE) and human capital efficiency (HCE), but no significant relationship with regards to structural capital efficiency. Overall, the results suggest that value creation capability of IFIs is highly influenced by HCE and CEE. Research limitations/implications The main limitation of the present study lies in its methodological tool, the VAIC methodology, which has been criticized by some researchers as not really measuring IC. Despite the inherent limitation of the VAIC methodology which relies on secondary data published in annual reports, it is still considered by some researchers as one of the best available tool to measure firms’ IC in the absence of access to detailed internal information on IC. Practical implications The findings may serve as a useful input for Islamic bankers in managing their investments in IC within their institutions. Originality/value The main contribution of this paper is to use a previously little-studied area, Islamic banking and finance, to identify the effect of intellectual capital on performance.

Value-added intellectual capital and financial performance: evidence from Mauritian companies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Reena Bhattu-Babajee ◽  
Boopen Seetanah
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Impact ◽  
Value Added ◽  
Dynamic Panel Data ◽  
Dynamic Panel ◽  
Content Type ◽  
Data Framework ◽  
Long Run ◽  
The Impact

PurposeThe purpose of this paper is to empirically assess the impact of value-added intellectual capital (VAIC) on the financial performance (FP) of companies in Mauritius.Design/methodology/approachThe research uses a dynamic panel vector error correction model (PVECM) which simultaneously allows for endogeneity and causality issues among the variables used.FindingsThe results show that VAIC enhances corporate FP, with a reported lower effect in the short run as compared to the long run. Other important determinants of firm’s performance are asset turnover, capital turnover and firm’s size. Leverage, on the other hand, is observed to be performance reducing in nature. FP of the companies is also a significant determinant of VAIC, implying reverse causal effects exist between the two variables of interest, namely, VAIC and FP.Research limitations/implicationsThe study can be enhanced by doing an industry-specific comparison of the impact of VAIC on FP for more insights.Practical implicationsIt is recommended that managers pay more attention to the role of firms’ stock of tangible and intangible assets, as this has a positive impact on firms’ FP. Also, the results may help to increase awareness of the importance of effective intellectual capital (IC) management within an organization. More so, as demonstrated by Ståhle et al. (2011), VAIC indicates the efficiency of the company’s labor and capital investments within firms in Mauritius. This study may, therefore, enable Mauritian firms to measure their IC efficiency and develop policies to promote and improve upon their intellectual potential to enhance firm’s performance.Originality/valueThe main theoretical contribution of this paper relates to the assessment and conceptualization of the bi-directional relationship between VAIC and FP. It confirmed that there are self-reinforcing feedback effects between VAIC and FP. Methodologically speaking, this paper investigates the VAIC–FP nexus in a dynamic setting using a dynamic panel data framework, namely, a PVECM which also allows for additional insights into the short- and long-run effects.

Exploring the effect of intellectual capital on financial performance: a study of Indian banks

2020 ◽  
Vol 24 (4) ◽  
pp. 511-529 ◽  
Author(s):  
Faizi Weqar ◽  
Ahmed Musa Khan ◽  
Syed Mohammed Imamul Haque
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Value Added ◽  
Physical Capital ◽  
Foreign Banks ◽  
Data Set ◽  
Content Type ◽  
Study Results ◽  
Nationalised Banks ◽  
Indian Banks

Purpose The purpose of this paper is to inspect the effect of intellectual capital (IC) on the financial performance (FP) of Indian banks. Design/methodology/approach The study uses the data of 58 Indian banks, namely, 20 nationalised banks, 17 private Indian banks and 21 private foreign banks, for the period between 2009 and 2018. A modified value-added intellectual coefficient methodology was used for measuring the efficiency of the IC. Findings The efficiency of IC significantly enhances the profitability and productivity of the Indian banks. Overall, human capital is the most substantial component of IC in augmenting the profitability and productivity of the Indian banking industry. Structural capital and physical capital are vital only for improving profitability while the contribution of relational capital towards the banks’ FP is nominal. The result also shows that amongst the three categories of Indian banks, private foreign banks are most efficient in leveraging their IC. Research limitations/implications The study results are only restricted to Indian banks and the data of only 58 banks are used for drawing the inferences. Originality/value The paper fills the void in the existing literature of IC and corporate FP by using the data set of Indian banks divided into the public sector, private Indian and private foreign banks.

Intellectual capital in Serbia’s hotel industry

2015 ◽  
Vol 27 (6) ◽  
pp. 1365-1384 ◽  
Author(s):  
Nick Bontis ◽  
Stevo Janošević ◽  
Vladimir Dženopoljac
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Hotel Industry ◽  
Value Added ◽  
Physical Capital ◽  
Employee Productivity ◽  
Senior Managers ◽  
Content Type ◽  
Return On Equity ◽  
Operating Profit

Purpose – The purpose of this study is to determine whether intellectual capital (IC) creates value in the Serbian hotel industry. Specifically, this paper examines to what degree IC and its key components affect the financial performance of hotels compared to physical and financial capital. Design/methodology/approach – The sample included all of the hotels that operated as independent entities in Serbia during 2009–2012. value-added intellectual coefficient was used to measure the level of IC contribution to value creation, which was linked to various measures of financial performance, including operating profit, return on equity, return on assets, profitability and employee productivity. Findings – Results indicate that after controlling for firm size and leverage, employee productivity and, to some extent, profitability were affected by human and structural capital. The research confirms that the financial performance of hotels in Serbia remains predominantly influenced by efficient use of physical capital. Research limitations/implications – The study’s generalizability is limited to the hotel sector within Serbia. Practical implications – Senior managers in the hotel industry must recognize the importance of managing both the physical aspects of their hotels and the intangible resources embedded in their employees and processes. Originality/value – The findings will aid recognition of the importance of investing in IC in hotel industry as a crucial element of achieving competitive advantage in the information age. Moreover, the findings suggest that long-term growth should not rely solely on physical and financial assets.

Impact of intellectual capital on financial performance: evidence from the Bangladeshi textile sector

2018 ◽  
Vol 14 (4) ◽  
pp. 429-454 ◽  
Author(s):  
Leena Afroz Mostofa Chowdhury ◽  
Tarek Rana ◽  
Mahmuda Akter ◽  
Mahfuzul Hoque
Keyword(s):  
Financial Performance ◽  
Performance Management ◽  
Emerging Economies ◽  
Intellectual Capital ◽  
Textile Industry ◽  
Value Added ◽  
Annual Reports ◽  
Future Research ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to investigate the influence of intellectual capital (IC) on financial performance and, in turn, to provide insights into its impact on emerging economies. Design/methodology/approach Data were collected from 34 textile firms in Bangladesh between 2013 and 2017. The IC efficiency, through value-added intellectual coefficient (VAIC) model, and its impact on financial performance, through return on assets (ROA), return on equity and asset turnover (ATO), was examined using descriptive statistics and multiple regression techniques. The analysis is based on secondary data obtained from annual reports. Findings The results indicate the impact of VAIC components on financial performance and also demonstrate diverse relationships with changes in financial indicators. The VAIC components significantly influenced productivity outcomes, with tangible capital playing a major role in both productivity and profitability. Moreover, it was found that structural capital had a considerable effect on ATO and ROA with human capital indicating an insignificant impact on all financial performance indicators. Research limitations/implications The research outcome is specific to the textile industry in emerging economies. The study may guide future research on IC performance in textile firms and cross-industry comparisons. Practical implications Managers, firm owners and regulators need to align IC to performance management to sustain the competitive advantage in globalised competitive settings. Originality/value The study provides an empirical evidence and extends knowledge of IC utilisation for enhancing the financial performance of the textile firms in emerging economies.

The interrelationship between intellectual capital and firm performance: evidence from China's manufacturing sector

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jian Xu ◽  
Jingsuo Li
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Manufacturing Sector ◽  
Value Added ◽  
Physical Capital ◽  
Listed Companies ◽  
High Tech ◽  
Manufacturing Companies ◽  
Content Type ◽  
The Impact

PurposeThe purpose of this paper is to examine the impact of intellectual capital (IC) and its components (human, structural and relational capitals) on the performance of manufacturing listed companies in China. This paper also investigates the impacts of company ownership, industry attributes and region on the IC-performance relationship.Design/methodology/approachThe study uses the data of 953 manufacturing companies listed on the Shanghai and Shenzhen Stock Exchanges over the period 2012–2016. The modified value-added intellectual coefficient (MVAIC) model is applied to measure IC efficiency. Finally, multiple regression analysis is employed to test the research hypotheses.FindingsThis study reveals that IC can enhance firm performance in China's manufacturing sector. Overall, earnings are affected by physical capital, human capital (HC) and structural capital (SC), and profitability and productivity are influenced by physical capital, HC, SC and relational capital. Physical capital is the most influential contributor to firm performance. In addition, state-owned enterprises have a greater impact of IC on firm performance than private-owned enterprises; high-tech manufacturing companies have higher IC performance than non-high-tech manufacturing companies; manufacturing companies in China's eastern region have higher IC performance than the counterparts in central and western regions.Practical implicationsThe findings may help managers, stakeholders and policymakers in developing countries to effectively and efficiently manage their IC resources.Originality/valueThis is the first study to evaluate IC and its relationship with firm performance among Chinese manufacturing listed companies using the MVAIC model.

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