Intellectual capital efficiency and corporate book value: evidence from Nigerian economy

2018 ◽  
Vol 19 (3) ◽  
pp. 644-668 ◽  
Author(s):  
Mutalib Anifowose ◽  
Hafiz Majdi Abdul Rashid ◽  
Hairul Azlan Annuar ◽  
Hassan Ibrahim
Keyword(s):  
Dynamic System ◽  
Cash Flow ◽  
Intellectual Capital ◽  
Value Relevance ◽  
Stock Exchange ◽  
Economic Value ◽  
Value Added ◽  
Content Type ◽  
Book Value ◽  
Listed Firms

Purpose The purpose of this paper is to examine the value relevance of intellectual capital (IC) by analysing the relationship between IC efficiency (ICE) and corporate book value of listed firms on main board of Nigeria Stock Exchange. Design/methodology/approach This study applies the resource-based theory in formulating two hypotheses that guide the results analysis. By employing a two-step dynamic system generalised method of moments (GMMs), and controlling for the possible endogeneity effect on the parameters estimated, for a sample of 91 listed firms on main board of Nigeria Stock Exchange, this study investigates the association of ICE and corporate book value, namely, cash flow from operation and economic value added (EVA), using data over the 2010 to 2014 financial years. Findings The results show a significant positive relationship between overall ICE and corporate book value (cash flow from operation and EVA). This study contributes to recent evidence concerning the value relevance of IC information to investors and other interested stakeholders. Research limitations/implications The generalisation of the results to smaller firms, in the alternative securities market, may be inappropriate as study sampled listed firms on the main board of Nigerian Stock Exchange. Practical implications Those charged with governance should be concerned with the investment and management of IC as it enhances the economic value and operating cash flow in line with the resource-based theory. Originality/value This study is first to consider the ICE study across all sectors in the Nigerian economy using modified Pulic value added intellectual capital. The study controls for heteroscedasticity and endogeneity issues by adoption of two-step dynamic system GMMs.

Intellectual capital vs the book-value of assets

2014 ◽  
Vol 15 (1) ◽  
pp. 65-82 ◽  
Author(s):  
Sang Ho Kim ◽  
Dennis Taylor
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Value Relevance ◽  
Share Price ◽  
Annual Reports ◽  
Content Type ◽  
Book Value ◽  
Listed Firms ◽  
Structural Capital ◽  
Tangible Assets

Purpose – The purpose of this paper is to provide new evidence, made possible by human capital data that became available after IFRS adoption, on the productivity of intellectual capital and its components. These productivity measures are modelled to determine their value-relevance in the share market, and the modelling is extended to comparative productivity measures for the book-value of assets. Design/methodology/approach – Financial data are sourced from financial databases and company annual reports on a sample of 160 Australian listed firms over a five-year period. Panel regression analysis is used to test five models built from Riahi-Belkaoui's (1999) general price model of the value-relevance of accounting numbers. Findings – The results show that the productivity of human capital, structural capital and intellectual capital are each significantly positively related to share price (i.e. have value-relevance), whereas the productivity of total assets at book-value is non-significant and tangible assets is inversely significant. Originality/value – This study constructs a new improved method of computing the amount of structural capital, and uses recently available financial statement data to provide first-time evidence on human capital and its inclusion in the determination of the amount of intellectual capital. These new models and data enable a direct comparison to be made between the value-relevance of intellectual and the book-value of assets.

scholarly journals Pengaruh Laba Akuntansi, Arus Kas Operasi, Price To Book Value, Dan Kinerja Keuangan Perusahaan Dengan Pendekatan Economic Value Added Terhadap Return Saham (Studi Kasus Pada Saham Perusahaan Pertambangan Di Bursa Efek Indonesia Periode Tahun 2008-2010)

2012 ◽  
Vol 4 (1) ◽  
pp. 71
Author(s):  
Ismail Marzuki ◽  
Susi Handayani
Keyword(s):  
Financial Performance ◽  
Cash Flow ◽  
Significant Influence ◽  
Stock Return ◽  
Stock Exchange ◽  
Economic Value ◽  
Value Added ◽  
Economic Value Added ◽  
Mining Company ◽  
Book Value

AbstractThe objectives of this research is to examine and analyze the influence of Accounting Profit, Operation Cash Flow, Price to Book Value, and Company Financial Performance Through Economic Value Added Approach to stock return of mining company that listed at Indonesia Stock Exchange in the period of 2008 – 2010. This research was an causal research with quantitative approach. The analyzing technique used in this research is multiple linier regressions analysis with SPSS program version 11.5. The result of this research shows that variable of accounting profit and operation cash flow do not have significant influence to stock return. While, variable of Price to Book Value and Company Financial Performance Through Economic Value Added Approach have a positive and significant influence to stock return of mining company that listed at Indonesia Stock Exchange in the period of 2008 – 2010.

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: 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.

Does institutional ownership affect the value relevance of accounting information?

2020 ◽  
Vol 28 (2) ◽  
pp. 323-342
Author(s):  
Mohamed Omran ◽  
Yasean A. Tahat
Keyword(s):  
Value Relevance ◽  
Accounting Information ◽  
Market Value ◽  
Institutional Ownership ◽  
Financial Leverage ◽  
Content Type ◽  
Book Value ◽  
Share Prices ◽  
Listed Firms ◽  
Positive Effects

Purpose Drawing upon agency theory, this study aims to assess the value relevance (VR) of accounting information released by non-financial firms listed on the Kuwait stock exchange for the period of 2015-2018. Also, the influence of institutional ownership level and other explanatory variables, namely, book value per share, earnings per share, growth in assets and changes in financial leverage on share prices is examined. Design/methodology/approach To test the hypotheses, the Ohlson (1995) model is extended. This study uses panel data analysis and applies appropriate statistical techniques to measure empirical relationships. Findings The results show that the VR of accounting information released by the Kuwaiti non-financial listed firms varies over the period of 2015-2018. Book value and earnings have significant and positive effects on share prices. In recent years, the VR of book value information has been growing, while that of earnings information has been declining. Institutional ownership level has a significant and positive influence on the VR of accounting information released by the Kuwaiti non-financial listed firms. The findings confirm a positive power, signalling growth in assets regarding the share prices. However, no significant relationship between changes in financial leverage and share prices is found. Practical implications The findings of the study provide evidence of the linkage between VR and institutional ownership level, which promotes the understanding of the influence of institutional investors on a firm’s market value. Empirical evidence from Kuwait will have international implications and can serve as a guide for accounting researchers studying other emerging markets. Capital market regulators can provide guidelines in the form of information characteristics and elements of financial statements that need improvement. Finally, the findings assist non-financial listed firms to enhance the quality of accounting information by identifying the strengths and weaknesses in their financial reports. Originality/value This study extends the previous literature by investigating a relatively new set of data in more depth than that has been examined by prior research, which focusses on the relationship between accounting information and the firm’s market value.

The effect of internal control on earnings quality in Iran

2017 ◽  
Vol 59 (4) ◽  
pp. 534-546 ◽  
Author(s):  
Mahdi Salehi ◽  
Mostafa Bahrami
Keyword(s):  
Internal Control ◽  
Value Relevance ◽  
Stock Exchange ◽  
Earnings Quality ◽  
Pearson Correlation ◽  
Systematic Sampling ◽  
Content Type ◽  
Listed Firms ◽  
Panel Data Regression ◽  
Data Regression

PurposeThe purpose of the present research is to examine the effect of internal control and risk management on earnings quality of companies listed on the Tehran Stock Exchange (TSE). Design/methodology/approachData were collected from 560 listed firms on TSE, which were selected using systematic sampling. Descriptive statistics, Pearson correlation and panel data regression were used for data analysis during 2009-2014. FindingsThe results showed that earnings management reduces earnings relevance and book value relevance through short-term and long-term discretionary accruals. Originality/valueThe outcomes of the current study are quite interesting to academia and practitioners.

scholarly journals Peran intellectual capital terhadap market to book value dan return on assets dengan research and development sebagai pemoderasi

2020 ◽  
Vol 9 (2) ◽  
pp. 297
Author(s):  
Pandu Alvi Baskoro ◽  
Suratno Suratno ◽  
Syahril Djaddang
Keyword(s):  
Research And Development ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Stock Exchange ◽  
Value Added ◽  
Market Value ◽  
Physical Capital ◽  
Book Value ◽  
Structural Capital ◽  
Corporate Resources

This study aims to support the role of Research and Development on Intellectual Capital on market value (MtBV) and corporate financial performance (ROA).  Using the Pulic model - Intellectual Value Coefficient (VAIC), this study examines the relationship between value added (VAIC) of the three main corporate resources (ie Physical Capital, Human Capital and Structural Capital), the company's market value (MtBV) and corporate finance ( ROA), and also Research and Development (R&D).  The data is gathered from 43 selected banking companies listed on the Indonesia Stock Exchange in 2013-2017.  Data analysis uses multiple regression.  The results show that Intellectual Capital (VAIC) does not affect to market value (MtBV), but the compilation of Intellectual Capital (VAIC) developed by Research and Development (R&D) as full moderation can support market value.  Intellectual Capital (VAIC) affects financial performance (ROA), as well as Intellectual Capital (VAIC) supported by Research and Development (R & D) as a quasi-moderation which also strengthening the financial performance (ROA).Keyword : Intellectual Capital (IC), Market to Book Value (MtBV), Financial Performance (ROA), Research and Development (R&D).

scholarly journals Analisis Modal Intelektual Dan Kinerja Keuangan Serta Pengaruhnya Terhadap Nilai Perusahaan

2019 ◽  
Author(s):  
Riski Wahyudi ◽  
Lidya Martha
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Firm Value ◽  
Stock Exchange ◽  
Value Added ◽  
Financial Statements ◽  
Manufacturing Companies ◽  
Return On Assets ◽  
Book Value ◽  
Company Value

This study aims to examine the effect of intellectual capital and financial performance on the value of companies in manufacturing companies listed on the Indonesia Stock Exchange (IDX). The research population is all manufacturing companies listed on the Indonesia Stock Exchange for the period 2013 - 2017. This sample was selected using a purposive sampling method with sample criteria. Manufacturing is listed on the IDX during the end of 2017 period, Manufacturing is listed consecutively during the period 2013 - 2017, Manufacturing that uses Rupiah, Manufacturing that has complete financial statements for the period 2013 - 2017, Manufacturing that has financial data in accordance with the variables to be tested, namely Price to Book Value, Value Added Intellectual Coefficient, Return On Assets, and Manufacturing that does not has data outliers, and obtained a sample of 11 companies. The data source is the annual financial statements of manufacturing companies taken through the official website of the Indonesia Stock Exchange ( www.idx.co.id ). Testing uses panel data regression analysis with the Eviews Program tool. Intellectual capital is measured using Value Added Intellectual Coefficient (VAIC), while financial performance is measured by Return on Assets (ROA) and company value measured by Price to Book Value (PBV). The results showed that the variable intellectual capital had a negative and not significant effect on firm value, while financial performance had a positive and significant effect on firm value.

scholarly journals Pengaruh Economic Value Added Dan Free Cash Flow Terhadap Stock Price

2021 ◽  
Vol 3 (2) ◽  
pp. 481
Author(s):  
Stefany Tantri ◽  
Yusbardini Yusbardini
Keyword(s):  
Cash Flow ◽  
Stock Price ◽  
Sampling Method ◽  
Stock Exchange ◽  
Manufacturing Sector ◽  
Economic Value ◽  
Value Added ◽  
Free Cash Flow ◽  
Economic Value Added ◽  
Purposive Sampling

The purpose of this study is to examine the effect of economic value added and free cash flow in manufacturing sector consumer industry in Indonesian Stock Exchange on period 2015-2019. The sample of this study are 31 company with purposive sampling method. Data were collected by official website of Indonesian Stock Exchange. The data will be analysis by using Eviews9 application. The result found that economic value added have significant effect to stock price, free cash flow have significant effect to stock price and economic value added and free cash flow simultaneously have significant effect to stock price. Tujuan dari penelitian ini adalah untuk mengetahui pengaruh nilai tambah ekonomis dan arus kas bebas pada perusahaan manufaktur sektor industri barang konsumsi di Bursa Efek Indonesia periode 2015-2019. Sampel dari penelitian ini adalah 31 perusahaan dengan metode purposive sampling. Data perusahaan diperoleh dari website resmi Bursa Efek Indonesia. Data dianalisis menggunakan aplikasi Eviews9. Hasil penelitian ini menemukan bahwa nilai tambah ekonomis mempunyai pengaruh yang signifikan terhadap harga saham, arus kas bebas mempunyai pengaruh yang signifikan terhadap harga saham, dan nilai tambah ekonomis dan arus kas bebas secara simultan mempunyai pengaruh yang signifikan terhadap harga saham.

scholarly journals Nexus between intellectual capital and business performance: evidence from India

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Faizi Weqar ◽  
Zubair Ahmad Sofi ◽  
S.M. Imamul Haque
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Business Performance ◽  
Stock Exchange ◽  
Value Added ◽  
Three Dimensions ◽  
Content Type ◽  
Firm Financial Performance ◽  
Study Results ◽  
Capital Efficiency

PurposeThe prime intention of this study is to examine the influence of intellectual capital (IC) on the financial performance of Indian companies listed on Standard and Poor Bombay Stock Exchange Sensitive Index (BSE SENSEX).Design/methodology/approachThe study employs the data of 30 most significant and most prominent companies of India listed on BSE SENSEX for 10 years from 2009–2010 to 2018–2019. Value Added Intellectual Coefficient (VAICTM) methodology developed by Pulic (2000) was employed for measuring the efficiency of the IC.FindingsThe efficiency of IC is substantially and positively associated with the financial performance of the Indian companies as measured by return on assets (ROA), market-to-book (MB) ratio and return on equity (ROE). Amongst the three dimensions of VAIC, capital employed efficiency (CEE) was the most vital element in contributing to the firm financial performance, followed by human capital efficiency (HCE). Structural capital efficiency (SCE) only helps in enhancing the ROA of Indian firms.Research limitations/implicationsThe study results are only restricted to the 30 companies of India listed on S&P BSE SENSEX Index. Thus generalization of the result needs especial caution.Originality/valueThe study fills the void in the current literature of IC and business performance and extends the understanding of their relationship by providing empirical evidence.

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