The intellectual capital needs of a transitioning economy

2015 ◽  
Vol 16 (3) ◽  
pp. 466-489 ◽  
Author(s):  
Allan O'Connor ◽  
Kai Du ◽  
Göran Roos
Keyword(s):  
Strategic Management ◽  
Intellectual Capital ◽  
Value Chain ◽  
Value Added ◽  
Intangible Asset ◽  
Firm Level ◽  
Content Type ◽  
Economic Productivity ◽  
Industrial Sectors ◽  
Industry Sectors

Purpose – Developed economies with high-cost environments face industrial transitions from scale-based manufacturing (MAN) to knowledge, technology and intangible asset-based sectors. The purpose of this paper is to examine the changes in employment and value-adding profiles of transitioning industry sectors in Australia and discuss the implications for policy that influences the intellectual capital (IC) profile of industrial sectors in transition. Design/methodology/approach – The approach borrowed concepts from the firm-level strategic management literature and applied them to a macro level of industry analysis. In this paper the authors examine the transitions in the Australian economy which, due to a rising cost base, is experiencing a decline in its value chain-oriented MAN sector. The authors contrast four industry sectors with the MAN sector and examine the different value creation models. Findings – The findings clearly show how the contribution to employment and value added (termed Economic Value Contribution ) of the different sectors vary. The authors extend these findings to a discussion on policy and the dimensions of IC that may have a role to play in facilitating transitions within an economy. The main conclusion is that a more rapid transition and higher value may be created if innovation and entrepreneurship are facilitated by targeted policies in transitioning sector. Research limitations/implications – This work is based on a single country analysis of selected industry sectors. Further work needs to be done across many more countries to contrast the findings across nations/regions that differ in industrial complexity and to refine the analytical framework to improve construct validity and increase analytical power. Practical implications – This work has implications for policy-makers facing the challenges of a transitioning economy, whether national or regional. Governments that are hands-on with respect to interventions to salvage and/or extend the life of sectors are at risk of missing opportunities to build the capacities and capabilities of emerging sectors while those governments that are hands-off, deferring to market mechanisms, risk transitions that are too little and/or too late to maintain a national or regional competitiveness. Originality/value – To the authors knowledge, this is the first attempt to integrate the specific firm-level strategic management perspectives, used in this paper, with the macro-policy level to examine industry sectors with the twin metrics of economic productivity and employment in transitioning economies.

Institutional distance, firm heterogeneities, and FDI location choice of EMNEs

2016 ◽  
Vol 7 (2) ◽  
pp. 192-215 ◽  
Author(s):  
Ying Zheng ◽  
Daying Yan ◽  
Bing Ren
Keyword(s):  
Value Chain ◽  
Location Choice ◽  
Value Added ◽  
Institutional Distance ◽  
Firm Level ◽  
Data Set ◽  
Positive Direction ◽  
Holistic View ◽  
Content Type ◽  
Strategic Intent

Purpose This paper aims to propose an integrated framework combining the cost-reduction rationale and the institution-leveraging rationale to explain how institutional distance, both formal and informal, influences emerging multinational enterprises (EMNEs)’ foreign direct investment (FDI) location choice. This paper also explores the moderating role of EMNEs’ FDI experience and strategic intent on value chain positioning as a reflection of firm heterogeneities, on the link between institutional distance and location choice. Design/methodology/approach This paper tests the hypotheses based on a firm-level longitudinal data set of FDI by Chinese EMNEs. The unique data are manually collected from Chinese companies listed on Shenzhen and Shanghai Stock Exchanges, composed of 250 FDI entries of 122 manufacturing firms from 2006 to 2010. The conditional logit model is used to estimate the proposed main effect and moderating effect. Findings Cultural distance does not deter Chinese EMNEs’ entrance in general, but firms investing in low value-added manufacturing subsidiaries are more likely to choose culturally similar countries than those investing in high value-added subsidiaries such as in upstream R&D and downstream marketing. Formal institutional distance with positive direction promotes Chinese EMNEs’ entrance, and this effect is enhanced when firms have less FDI experience and have the strategic intent to invest in high value-added subsidiaries. Originality/value This paper contributes to the current literature by identifying a holistic view of the institutional influences on FDI location choice of EMNEs and revealing how firm-level heterogeneities, particularly FDI experience and strategic intent of subsidiary value chain positioning, shape the boundary conditions of the institutional effects in different ways.

Strategic transformation in the value-added wood products companies

2015 ◽  
Vol 10 (2) ◽  
pp. 224-242 ◽  
Author(s):  
Minli Wan ◽  
Katja Lähtinen ◽  
Anne Toppinen
Keyword(s):  
Value Chain ◽  
Value Added ◽  
Wood Products ◽  
Dynamic Capability ◽  
Firm Level ◽  
Content Type ◽  
Intangible Resources ◽  
Chinese Wood ◽  
The Impact ◽  
Strategic Transformation

Purpose – China is a leading country in the production, consumption and exports of value-added wood products. Despite this fact, the sources of competitiveness and the existing strategies in the Chinese wood products companies have not been profoundly studied in an international context. The purpose of this paper is to fill these gaps by exploring managerial perceptions of these issues. Design/methodology/approach – The theoretical ingredients originating from the value chain theory, functional upgrading, the dynamic capability perspective and the natural resource-based view were combined to explore the shift of business functions and sources of the firm-level competitiveness in the Chinese wood products companies. In the empirical part, data from qualitative semi-structured interviews made with 28 managers of seven companies in China based on the case study method were used. Findings – Our results indicate a transition from non-branded manufacturing to original equipment manufacturing to original brand manufacturing business model. With this strategic transformation, the amount of resources and the relative importance of intangible resources increased and the nature of tangible resources also changed. Practical implications – Chinese companies tend to shift from low-value-added to high-value-added products production. Our results are not only informative about the current situation of the Chinese wood products companies, but also can be used as a background for assessing the impact of China’s increasing competitiveness on the future international wood products market. Originality/value – The dynamic capability perspective was incorporated in a new empirical approach to study the strategic management of woodworking industries, and our results provide new information on the importance of intangible resources for firm competitiveness.

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.

Exploring the impact of intellectual capital on company reputation and performance

2018 ◽  
Vol 19 (5) ◽  
pp. 915-934 ◽  
Author(s):  
Gianluca Ginesti ◽  
Adele Caldarelli ◽  
Annamaria Zampella
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Corporate Reputation ◽  
Intangible Asset ◽  
Competition Authority ◽  
Data Set ◽  
Content Type ◽  
Capital Efficiency ◽  
And Performance ◽  
The Impact

Purpose The purpose of this paper is to analyse the impact of intellectual capital (IC) on the reputation and performance of Italian companies. Design/methodology/approach The paper exploits a unique data set of 452 non-listed companies that obtained a reputational assessment from the Italian Competition Authority (ICA). To test the hypotheses, this study implemented several regression analyses. Findings Results support the argument that human capital efficiency is a key driver of corporate reputation. Findings also reveal that companies, which obtained reputational rating under ICA scrutiny, show a positive relationship between IC elements and various measures of financial performance. Research limitations/implications The study focuses on a single country; it is not free from the imprecisions of Pulic’s VAIC model. Practical implications This paper recommends companies that are interested to achieve a robust reputation should consider the human capital as a strategic intangible asset. Second, the results suggest that companies with an ICA reputational rating are able to leverage their intangibles to potentiate performance and competitiveness. Originality/value This is the first empirical investigation on the contribution of IC in generating value for corporate reputation. Additionally, the study contributes to the literature on the link between IC and performance by examining a sample of firms not yet explored in prior research.

An exploration into the understanding of football value chain in south of Brazil

2019 ◽  
Vol 27 (3) ◽  
pp. 644-665 ◽  
Author(s):  
Rosiane Serrano ◽  
Daniel Pacheco Lacerda ◽  
Ricardo Augusto Cassel ◽  
Priscila Ferraz Soares ◽  
Fabio Sartori Piran
Keyword(s):  
Value Chain ◽  
Design Methodology ◽  
Value Added ◽  
Independent Manner ◽  
Problematic Situation ◽  
Content Type ◽  
Football Clubs ◽  
South Of Brazil ◽  
Structured Questionnaire ◽  
Current Reality

Purpose Football is significant in the global economic context. However, the same significance is not identified in the value added to the chain, as the elements that make it up act in a disintegrated and independent manner with undesired effects. Consequently, it is necessary to structure the undesired effects to seek the basic causes that sustain this problematic situation. Thus, this paper aims to use a CRT to structure the undesired effects and basic causes that limit the positive economic impacts of the south Brazilian football value chain. Design/methodology/approach A semi-structured questionnaire was applied with questions about the existing constraints. Based on the answers in the interviews, the current reality tree was elaborated, premised on identifying the basic causes that sustain the undesirable effects detected. Findings Among the main results, it was identified that management problems of the traditional leaders of football clubs and federations are considered the main reason why south of Brazil football cannot fully exploit its economic potential. Originality/value It is evidenced that the paper shows the undesired effect that has the most impact on the development of this chain, and it is important to propose improvements to its root causes, aiming at greater efficacy of the resulting actions.

Intellectual capital: a determinant of firms' operational efficiency

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kanishka Gupta ◽  
T.V. Raman
Keyword(s):  
Intellectual Capital ◽  
Stochastic Frontier Analysis ◽  
Stock Exchange ◽  
Stochastic Frontier ◽  
Value Added ◽  
Financial Sector ◽  
Operational Efficiency ◽  
Content Type ◽  
Frontier Analysis ◽  
The Impact

PurposeIntellectual capital (IC) has been recognized in improving the efficiency of businesses and gaining competitive edge in the developed world. The present study offers perspectives into the effect of IC on the efficiency of the Indian financial sector companies.Design/methodology/approachFor the purpose of evaluating efficiency, the research has used stochastic frontier analysis (SFA). All Indian financial sector companies listed in National Stock Exchange (NSE-500) for the timeframe of ten years (2008–2018) have been considered. The paper has employed modified Pulic's Value Added Intellectual Coefficient (VAICTM) as a proxy to measure IC. Correlation and panel data regression have been used in order to examine the relationship.FindingsThe results of the study indicate positive and significant relationship between IC and efficiency of the firm. The results also show that all the components of IC, that is, human capital, relational capital, process capital and capital employed have a significant impact on firms' efficiency. Additionally, it has been seen that sample companies do not invest in research and development leading to no innovation capital.Practical implicationsThe research will assist managers in managing and controlling the IC, investors in matters related to investment and financial experts in improving the company's IC and value creation.Originality/valueThe current research is one of the pioneering studies in the context of Indian financial sector that examines the impact of modified VAIC on operational efficiency calculated using SFA.

Intellectual capital and firm performance in emerging economies: the case of India

2016 ◽  
Vol 26 (3) ◽  
pp. 410-430 ◽  
Author(s):  
Santi Gopal Maji ◽  
Mitra Goswami
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Value Added ◽  
Relative Importance ◽  
Content Type ◽  
Knowledge Based ◽  
Traditional Sector ◽  
Steel Sector ◽  
Capital Efficiency ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of intellectual capital (IC) on Indian traditional sector and compare the relative importance of IC on corporate performance of Indian knowledge-based sector (engineering sector) and traditional sector (steel sector). Design/methodology/approach Secondary data on 100 listed Indian firms, comprising of 44 firms from the engineering sector and 56 from the steel sector, are collected from “Capitaline Plus” Corporate database for a period of 14 years from 1999-2000 to 2012-2013. IC and its components are computed using Pulic’s value-added intellectual coefficient model and firm performance is measured by return on asset. Fixed effect regression model is used to investigate the hypothetical relationship between IC and firm performance. Further, quantile regression is used to check the robustness of the results. Findings The results indicate that IC efficiency and physical capital efficiency are positively and significantly associated with the firm performance for both the sectors. Regarding the components of IC, the coefficient of human capital efficiency is positive and significant, but the present effort fails to disentangle any significant influence of structural capital efficiency on firm performance. However, the results indicate that the influence of IC efficiency on firm performance is significantly greater in case of knowledge-based sector than that of traditional sector. Practical implications The findings of the study are useful for the decision makers, as the results indicate that the IC plays crucial role in value creation not only for knowledge-based firms but also for the firms belonging to the traditional manufacturing sector. Originality/value In the Indian context, this is the first study to examine the relative importance of IC in a knowledge-based sector and a traditional sector using appropriate methodology.

Does intellectual capital impact firms' capital structure? Exploring the role of firm risk and profitability

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
A. D'Amato
Keyword(s):  
Capital Structure ◽  
Intellectual Capital ◽  
Value Added ◽  
Firm Risk ◽  
Financial Leverage ◽  
Data Set ◽  
Content Type ◽  
Novel Approach ◽  
Firm Profitability ◽  
The Relationship

PurposeThe purpose of this paper is to analyze the relationship between intellectual capital and firm capital structure by exploring whether firm profitability and risk are drivers of this relationship.Design/methodology/approachBased on a comprehensive data set of Italian firms over the 2008–2017 period, this paper examines whether intellectual capital affects firm financial leverage. Moreover, it analyzes whether firm profitability and risk mediate the abovementioned relationship. Financial leverage is measured by the debt/equity ratio. Intellectual capital is measured via the value-added intellectual coefficient approach.FindingsThe findings show that firms with a high level of intellectual capital have lower financial leverage and are more profitable and riskier than firms with a low level of intellectual capital. Furthermore, this study finds that firm profitability and risk mediate the relationship between intellectual capital and financial leverage. Thus, the higher profitability and risk of intellectual capital-intensive firms help explain their lower financial leverage.Research limitations/implicationsThe findings have several implications. From a theoretical standpoint, the paper presents and tests a mediating model of the relationship between intellectual capital and financial leverage and its underlying processes. In terms of the more general managerial implications, the results provide managers with a clear interpretation of the relationship between intellectual capital and financial leverage and point to the need to strengthen the capital structure of intangible-intensive firms.Originality/valueThrough a mediation framework, this study provides empirical evidence on the relationship between intellectual capital and firm financial leverage by exploring the underlying mechanisms behind that relationship, which is a novel approach in the literature.

Measuring economies’ pivotability on the global value chain under the perspective of inter-country input–output network

2021 ◽  
pp. 2150289
Author(s):  
Lizhi Xing ◽  
Yu Han ◽  
Dawei Wang
Keyword(s):  
Value Chain ◽  
Betweenness Centrality ◽  
Value Added ◽  
The United States ◽  
Global Value Chain ◽  
Input Output ◽  
Trade Disputes ◽  
Industrial Sectors ◽  
Edge Based ◽  
Novel Coronavirus

Under the dual background of trade disputes between China and the United States and the epidemic of 2019 novel coronavirus, the existing Global Value Chain (GVC) division and trading system are facing unprecedented impact. This paper reinforces the present studies on international trade by analyzing the fragments of GVC, which are made of numerous Inter-Country Input–Output (ICIO) relations. We first redefine the inter-country and inter-sector propagating process of intermediate goods, coming up with the concept of Strongest Relevance Path Length (SRPL) based on Revised Floyd–Warshall Algorithm (RFWA). Second, enlightened by betweenness centrality, we introduce Weighted Betweenness Centrality of Edge based on RFWA to measure the Value-Added Pivotability of Input–Output Relations, which brings forth pivotability at domestic, international, and global levels. The results show how much a given country can influence the world economic pattern by linking worldwide upstream and downstream industrial sectors, be it at home or abroad. Also, we can try to explain what is the cause of the phenomenon that the economic influence of nations is trading off and taking turns with all sorts of local or even global evens happening.

Intellectual capital and asset quality in an emerging banking market

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nicholas Asare ◽  
Margaret Momo Laryea ◽  
Joseph Mensah Onumah ◽  
Michael Effah Asamoah
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Value Added ◽  
Annual Data ◽  
Capital Investments ◽  
Content Type ◽  
Panel Regressions ◽  
Banking Market ◽  
Asset Quality

PurposeThis study examines the causal relationship between intellectual capital and asset quality of banks in Ghana.Design/methodology/approachUsing annual data extracted from audited financial statements of 24 banks from 2006 to 2015, a ratio of non-performing loans to gross loans and advances is employed to estimate asset quality growths while the value-added intellectual coefficient by Pulic (2008, 2004) measures intellectual capital. The panel-corrected standard errors estimation technique is used to estimate panel regressions with asset quality as the dependent variable.FindingsAsset quality of banks in Ghana is generally not affected by intellectual capital. However, when intellectual capital is divided into its components, the study indicates that there are significant positive relationships between asset quality and two components of intellectual capital. Thus, structural capital and human capital efficiencies positively affect the asset quality of banks.Practical implicationsThe findings of the study implore managements of banks to increase structural and human capital investments and efficiencies to improve asset quality. Furthermore, the results have direct implications on developments in financial markets in emerging economies.Originality/valueThe study analyses the link between typical intellectual capital and asset quality of banks which is yet to be empirically examined in an emerging banking market.

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