The cubic S-curve relationship between board independence and intellectual capital efficiency: does firm size matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qian Long Kweh ◽  
Wen-Min Lu ◽  
Irene Wei Kiong Ting ◽  
Hanh Thi My Le
Keyword(s):  
Firm Size ◽  
Intellectual Capital ◽  
Nonlinear Effects ◽  
Board Independence ◽  
Resource Based View ◽  
Content Type ◽  
Capital Efficiency ◽  
S Curve ◽  
Size Matter ◽  
Practical Implications

PurposeFirst, this study assesses firms’ efficiency of transforming intellectual capital (IC) components into firm performance. Second, this study examines (1) cubic S-curve relationship between board independence and IC efficiency and (2) how firm size moderates the cubic S-curve relationship.Design/methodology/approachThis study employs a stochastic nonparametric envelopment of data (StoNED) framework to estimate IC efficiency, which is derived from the estimation process of transforming structural, relational and human capitals into accounting- and market-based performance indicators. This study conducts regression analyses on 1,104 firm-year observations of Taiwanese semiconductor firms over the period of 2011–2018.FindingsStoNED results suggest that sample firms' IC efficiency can be relatively improved by approximately 80%. Regression results indicate that a cubic S-curve relationship between board independence and IC efficiency exists, and firm size moderates the nonlinear effects.Practical implicationsOverall, this study highlights the importance of examining the nonlinear effect of board independence on IC efficiency from the perspective of agency theory, and the moderating effect from firm size, which may suggest availability of resources from the resource-based view of the firm.Originality/valueThis study contributes to the literature through the innovative application of an efficiency-based tool for evaluating IC efficiency. The cubic S-curve relationship between board independence and IC efficiency also points to the policy concerning the appropriate number of independent directors on board.

Integrated reporting and board characteristics: evidence from top Australian listed companies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohamed Omran ◽  
Dinesh Ramdhony ◽  
Oren Mooneeapen ◽  
Vishaka Nursimloo
Keyword(s):  
Firm Size ◽  
Gender Diversity ◽  
Listed Companies ◽  
Board Independence ◽  
Integrated Reporting ◽  
Growth Opportunities ◽  
Content Type ◽  
Board Characteristics ◽  
International Integrated Reporting Council ◽  
Practical Implications

PurposeDrawing upon agency theory, this study analyses the influence of board characteristics on integrated reporting (IR) for the top 50 companies listed on the Australian Securities Exchange (ASX50). Focus is placed on IR at the aggregate level as well as its separate components, namely Future Opportunities and Risks (FOPRI), Governance and Strategy (GOVSTR), Performance (PERF), Overview and Business Model (OBM) and General Preparation and Presentation (GPP).Design/methodology/approachA checklist is devised based on the IIRC (International Integrated Reporting Council) framework to track companies' disclosures for the period from 1st July 2014 to 30th June 2017. Regression analysis is used to investigate the determinants (board size, board independence, activity of the board, gender diversity, firm size, profitability and growth opportunities) of IR and its separate components.FindingsThe findings indicate a significant and positive effect of board independence on the aggregate IR index, FOPRI and GPP. A negative and significant association is found between activity of the board and both the aggregate IR index and its separate components, including GOVSTR, PERF and GPP. Additionally, the aggregate IR index is significantly related to firm size, profitability and growth opportunities.Research limitations/implicationsThe limited sample of 50 companies over three years is the main limitation of the study. The study suffers from an inherent limitation from the use of content analysis in assessing the level of IR. No checklist to measure the level of IR can be fully exhaustive. Furthermore, we focus on whether an item in the checklist is disclosed, using a dichotomous scale, thus ignoring the quality of information disclosed.Practical implicationsThe study has several practical implications. From a managerial perspective, it shows that having more board meetings harms the level of IR. The results can guide regulators, such as the Australian Securities and Investment Commission (ASIC) and the Australian Securities Exchange (ASX), when drafting new regulations/guidelines/listing rules. If regulators aim for a higher level of integration in the reports, they know which “triggers to pull” to attain their target. Our results can guide regulators to choose the appropriate trigger among various alternatives. For instance, if a higher level of integrated reporting is desired, size instead of profitability should be chosen. Finally, ASX listed companies can use our checklist as a scorecard for their self-assessment.Originality/valueThis research is the first to investigate IR by devising a checklist based on IIRC (2013) along with an additional GPP component in the ASX context. Using separate models to examine each component of the aggregate IR index is also unique to this study. The study also brings to the fore the role of gender-diverse boards in promoting IR. It reiterates the debate about imposing a quota for better gender representation on boards.

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.

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.

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.

Drivers for voluntary intellectual capital reporting based on agency theory

2019 ◽  
Vol 20 (2) ◽  
pp. 264-281 ◽  
Author(s):  
Viktoria Goebel
Keyword(s):  
Propensity Score ◽  
Agency Theory ◽  
Propensity Score Matching ◽  
Intellectual Capital ◽  
Integrated Reporting ◽  
Content Type ◽  
The Relationship ◽  
Practical Implications ◽  
Management Report

PurposeThe purpose of this paper is to investigate the drivers for voluntary intellectual capital (IC) reporting based on agency theory. This study responds to calls for critical investigations of IC reporting utilising Goebel’s (2015a) IC measuring approach to investigate the role of IC value and mispricing for IC reporting.Design/methodology/approachA mandatory management report offers a unique research setting in Germany. The content analysis results of 428 German management reports are used in a regression analysis with leverage, ownership diffusion, IC value and mispricing. Additionally, a propensity score matching approach examines the relationship between IC reporting and IC value.FindingsThe regression results show that companies use voluntary IC reporting to encounter mispricing. IC reporting is negatively associated with leverage, whereas ownership diffusion and IC value show no significant results. The propensity score matching approach is also not significant.Research limitations/implicationsThis study contributes to strengthening and testing agency theory for IC reporting. As mispricing is identified to play an important role for IC reporting, IC research should account for mispricing.Practical implicationsThe findings suggest to reopen a discussion on the declared aims of the German management report and the international integrated reporting model to provide information on value creation, as IC value shows no link to IC reporting.Originality/valueThis study innovatively links IC reporting to IC value and mispricing to investigate drivers for voluntary IC reporting.

Intellectual capital in family firms: human capital identification and measurement

2015 ◽  
Vol 16 (1) ◽  
pp. 199-223 ◽  
Author(s):  
Enrique Claver-Cortés ◽  
Patrocinio Carmen Zaragoza-Sáez ◽  
Hipólito Molina-Manchón ◽  
Mercedes Úbeda-García
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Family Firms ◽  
Balance Sheet ◽  
Research Approach ◽  
Competitive Advantages ◽  
Content Type ◽  
Starting Point ◽  
Practical Implications

Purpose – Based on the literature devoted to family firms and the intellectual capital-based view of the firm, the purpose of this paper is not only to identify the most important human capital intangibles owned by family firms but also to show a number of indicators that can help measure them. Design/methodology/approach – A qualitative case-study-based research approach was adopted taking as reference: 25 family firms belonging to different sectors; previous works existing in the literature; and the intellectus model. Findings – The present study identifies ten intangibles associated with the human capital of family firms and shows 60 indicators that can be used to measure them. It additionally provides empirical evidence and gives examples of these intangibles through the analysis of 25 international family firms. Research limitations/implications – The difficulty in collecting all the human capital intangibles of family firms; the problems associated with the creation of accurate indicators; and those specific to the research methodology adopted. Practical implications – Identifying the human capital intangibles of family firms and their indicators can help managers become aware of their importance, and this will consequently help them improve their management. This could be an interesting starting point to value these intangibles in the balance sheet as well as to draw comparisons between family and non-family organisations. Originality/value – The framework provided by family firms sheds light on several intangibles specific to these firms – precisely for their condition as “family” firms. Those intangibles – human capital intangibles being especially highlighted in this study – provide the basis for the achievement of competitive advantages.

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.

How does cooperation affect innovation in micro-enterprises?

2014 ◽  
Vol 52 (8) ◽  
pp. 1390-1409 ◽  
Author(s):  
Chiayu Tu ◽  
Shiuh-Nan Hwang ◽  
Jehn-Yih Wong
Keyword(s):  
Product Innovation ◽  
Entrepreneurial Success ◽  
Resource Based View ◽  
Content Type ◽  
Success Stories ◽  
Final Questionnaire ◽  
Practical Implications ◽  
Micro Enterprises ◽  
Night Markets

Purpose – This research investigates how micro-enterprises cooperate with external parties in order to promote innovation and entrepreneurial success. The purpose of this paper is to describe supplier and consumer cooperation and analyzes how these two behavioral modes influence the product and service innovations of micro-enterprises. Based on the resource-based view of the firm, the authors show that micro-enterprises help the source of innovation by tapping into the resources and abilities of suppliers. Design/methodology/approach – This research used a questionnaire to randomly sample micro-entrepreneurs that run stalls at night markets. Before distributing the final questionnaire, the authors in-depth interviewed ten micro-entrepreneurs and asked them to openly describe their entrepreneurial processes and success stories. Findings – The results of this study show that cooperation with consumers does not improve product and service innovations. By contrast, the cooperation of micro-enterprises with suppliers was found to increase the generation of product and service innovations in the present study. And the findings show that the effect of innovation approaches on entrepreneurial success indicates that product innovation positively improves firm performance. Last, from the perspective of cooperation behavior, product innovation mediates entrepreneurial success through cooperation with suppliers. Research limitations/implications – Because of respondents were night market vendors and thus the results are not necessarily generalizable to other types of micro-enterprises. Therefore, researchers are encouraged to test multiple types of micro-enterprises. Second, this research aimed to differentiate the relationships between innovation approaches and entrepreneurial success by focussing exclusively on product and service innovations. Therefore, other variables should be included in future studies. Practical implications – As for practical implications in the field of cooperation behavior, the authors have shown that it is crucial to maintain long-term cooperative relations with trusted suppliers. Social implications – As for practical implications in the field of cooperation behavior, the authors have shown that it is crucial to maintain long-term cooperative relations with trusted suppliers. Originality/value – This paper fulfills an identified need to study how innovation in micro-enterprises.

Does corporate governance influence earnings management in listed companies in Bahrain Bourse?

2018 ◽  
Vol 12 (4) ◽  
pp. 551-570 ◽  
Author(s):  
Bahaaeddin Alareeni
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Design Methodology ◽  
Empirical Support ◽  
Asian Country ◽  
Listed Companies ◽  
Discretionary Accruals ◽  
Board Independence ◽  
Content Type ◽  
Practical Implications

PurposeThis paper aims to consider data for listed companies in Bahrain Bourse to determine whether companies practice earnings management (EM). Further, the effect of a set of corporate governance characteristics on EM practices is examined.Design/methodology/approachThe EM level was measured using discretionary accruals (DA) [calculated using the Modified Jones (1995) Model]. The study sample consisted of 20 companies listed during the period 2011-2015. Panel regression model was used to test the study hypotheses and achieve the study aims.FindingsEM is negatively correlated with board size, confirming that a larger board is associated with a lower level of EM practices. Further, board independence is positively correlated with EM, suggesting that the larger the number of independent directors, the higher the level of EM practices. In addition, internal ownership is positively related to EM, confirming that the higher level of internal ownership increases EM practices. CEO duality does not appear to have any effect on EM in Bahrain Bourse. More interestingly, the findings reveal that companies practice EM through income-increasing DA.Research limitations/implicationsFinancial data and data related to other corporate governance characteristics are lacking.Practical implicationsThe results of this study provide empirical support for the development of new regulations and amendments and necessary corrective decisions regarding the effectiveness of applying corporate governance code in Bahrain Bourse. More specifically, this study reveals an urgent need for new amendments to restrict EM practices in Bahrain Bourse.Originality/valueThis study enriches the EM literature by covering Bahrain as an Asian country, which has not been sufficiently examined in relation to this topic. Further, this study provides a clear picture of the level of EM practices in Bahrain Bourse to multiple parties.

New trends in intellectual capital reporting

2018 ◽  
Vol 19 (4) ◽  
pp. 814-835 ◽  
Author(s):  
Francesca Manes Rossi ◽  
Giuseppe Nicolò ◽  
Paolo Tartaglia Polcini
Keyword(s):  
Intellectual Capital ◽  
Design Methodology ◽  
Information Needs ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
University System ◽  
Content Type ◽  
Explanatory Factors ◽  
The Relationship ◽  
Practical Implications

Purpose The purpose of this paper is to explore a new way to disclose intellectual capital (IC) in universities through their websites. Going beyond traditional tools used for intellectual capital disclosure (ICD), this study aims at identifying possible determinants of ICD via the web. Design/methodology/approach This paper analyses the institutional websites of a sample of Italian universities adapting the theoretical framework developed by Low et al. (2015) to the peculiarities of the Italian university system. Moreover, the relationship between certain explanatory factors identified in previous research and the extent of online ICD represented by two disclosure indexes was tested through an ordinary least squares regression model. Findings The analysis reveals the extensive use of ICD via websites, especially regarding human and internal capital, while the disclosure of external capital through this means is still limited. Internationality and online visibility both positively affect the extent of a university’s ICD. Research limitations/implications The paper represents the first study investigating online ICD and its determinants in universities, contributing new knowledge to help answer the how and what of the matter. Practical implications The results can serve as encouragement to university managers to enhance online ICD to meet the information needs of a wider audience. Originality/value This is the first study to provide evidence about online ICD in universities and to reveal some of the possible determinants to improve this disclosure.

Sign in / Sign up

Export Citation Format

Share Document