scholarly journals The relationship between intellectual capital information and firms’ market value: a study from an emerging economy

2019 ◽  
Vol 24 (1) ◽  
pp. 39-51
Author(s):  
A.A. Ousama ◽  
Mashael Thaar Al-Mutairi ◽  
A.H. Fatima
Keyword(s):  
Intellectual Capital ◽  
Firm Value ◽  
Stock Exchange ◽  
Market Value ◽  
Total Sample ◽  
Emerging Economy ◽  
Annual Reports ◽  
Content Type ◽  
Knowledge Based Economy ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between the intellectual capital (IC) information reported in the annual reports and market value of the companies listed on the Qatar Stock Exchange. Design/methodology/approach The study is based on a panel data collected from the annual reports and Bloomberg database for six years, specifically the periods 2010-2012 and 2016-2018. The total sample consists of 252 observations. The theoretical framework was developed in reference to the resource-based theory. The regression model is based on Ohlson’s model, which has been modified by including IC information. Findings The study found that there is a significant relationship between IC information and firm market value. This finding indicates that companies report their IC to help the stakeholders (e.g. shareholders, investors) to understand the real value of the company (which includes IC values). Practical implications The shift to a knowledge-based economy (KBE) has made knowledge a driver for economic growth, and it has become more important than capital, land and labour. This shift makes IC and resources vital for companies to create wealth, value and gain competitive advantage. The State of Qatar plans to transform its economy to a KBE in its “Qatar Vision 2030”. The findings of the study show that the companies have started to depend more on IC to contribute to transforming Qatar’s economy to a KBE. Originality/value This study could be considered a pioneer study to examine the association of IC disclosure and firm value in Qatar. Furthermore, prior literature has mixed findings, which justifies further investigation of IC’s effect on market value, particularly in the emerging economy of Qatar.

Measuring the intellectual capital of Italian listed companies

2017 ◽  
Vol 18 (4) ◽  
pp. 710-732 ◽  
Author(s):  
William Forte ◽  
Jon Tucker ◽  
Gaetano Matonti ◽  
Giuseppe Nicolò
Keyword(s):  
Intellectual Capital ◽  
Firm Growth ◽  
Stock Exchange ◽  
Market Value ◽  
Investment Strategy ◽  
Sources Of Information ◽  
Content Type ◽  
Italian Context ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between intellectual capital (IC), measured in terms of the market to book (MTB) ratio, and potential key determinants of IC value such as intangible assets (IA) and a range of other factors. Design/methodology/approach The study is conducted for a sample of 140 Italian corporations over the period 2009-2013. Applying a holistic market-based approach, the relationship between IC value and selected determinants from the extant literature is tested. Five hypotheses are tested using a pooled OLS regression model, while controlling for time. ROE is employed as a useful firm profitability indicator from the perspective of an equity investor. Moreover, four robustness tests are undertaken. Findings The results show that IA, profitability, leverage, industry type, auditor type, and family ownership positively affect IC value, whereas SIZE and AGE negatively affect IC value. Moreover, the findings of the robustness tests suggest that all firms, and not just knowledge-intensive business service industry firms, manage knowledge. Research limitations/implications The validity of the findings is limited to the Italian context, as the study focuses on a sample of companies listed on the Milan Stock Exchange, all of which prepare their individual financial statements according to IFRS. Further limitations are related to the use of market value in the short term, as it is influenced by market volatility. The study may allow academic researchers to investigate the impact of other non-accounting sources of information on market value within a multidisciplinary perspective. Practical implications This paper also has implications for managers and practitioners. The findings suggest that managers should not take for granted that firm growth (an increase in SIZE) alone will lead to an increase in IC value, in the absence of a consistent IC-oriented investment strategy. Managers should also avoid smoothing their IC investment as the company grows, in order to maintain a stable MTB ratio. Further, standard setters should seek to explore better means of disclosing non-accounting information relating to IC value. Originality/value This paper contributes to the IC literature as it is the first study which applies the market capitalization approach to analyze IC value determinants in the Italian context, within the framework of IFRS. The findings reveal some interesting relationships between the MTB ratio and recognized intangible investments, which are found to be insignificant in previous studies, confirming that, through the holistic effect, the MTB ratio may be a good proxy for IC.

scholarly journals INTENSITAS RESEARCH AND DEVELOPMENT, GOODWILL, INTELLECTUAL CAPITAL DAN PERFORMA FINANSIAL SEBAGAI PENENTU NILAI PERUSAHAAN

2021 ◽  
Vol 1 ◽  
pp. 296-306
Author(s):  
Ellen Monata Wahono ◽  
Shinta Permata Sari
Keyword(s):  
Research And Development ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Firm Value ◽  
Stock Exchange ◽  
Total Sample ◽  
Annual Reports ◽  
Manufacturing Companies ◽  
Fierce Competition ◽  
A Company

The increasingly fierce competition that occurs between companies in the  current  era of globalization is forcing the company to improve its strategies. Therefore, the main purpose of establishing a company is to increase the value of the firm. To achieve that purpose,managers have to understand the factors that can increase the value of the firms and also fulfillthe interests of stakeholders. This study aims to analyze the effect of Research and Development Intensity (RnD), Goodwill (GDW), Intellectual Capital (IC), and Financial Performance (PF) on Firm Value. The research data is obtained from  the  annual reports  of  manufacturing  companies  listed  on the Indonesia  Stock  Exchange  in 2015-2019 with a total sample of 60 after meeting certain criteria. The data is analyzed using multiple linear regression analysis.The results show that goodwill, intellectual  capital,  and financial performance have an effect on firm value. Meanwhile, the intensity of research and development has no effect on firm value The increasingly fierce competition that occurs between companies in the  current  era of globalization is forcing the company to improve its strategies. Therefore, the main purpose of establishing a company is to increase the value of the firm. To achieve that purpose,managers have to understand the factors that can increase the value of the firms and also fulfillthe interests of stakeholders. This study aims to analyze the effect of Research and Development Intensity (RnD), Goodwill (GDW), Intellectual Capital (IC), and Financial Performance (PF) on Firm Value. The research data is obtained from  the  annual reports  of  manufacturing  companies  listed  on the Indonesia  Stock  Exchange  in 2015-2019 with a total sample of 60 after meeting certain criteria. The data is analyzed using multiple linear regression analysis.The results show that goodwill, intellectual  capital,  and financial performance have an effect on firm value. Meanwhile, the intensity of research and development has no effect on firm value    

The effect of intangible assets on sustainable growth and firm value – Evidence on intellectual capital investment in companies listed on Bucharest Stock Exchange

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Catalin Ionita ◽  
Elena Dinu
Keyword(s):  
Growth Rate ◽  
Intellectual Capital ◽  
Firm Value ◽  
Intangible Assets ◽  
Stock Exchange ◽  
Listed Companies ◽  
Sustainable Growth ◽  
Content Type ◽  
Sustainable Growth Rate ◽  
The Impact

PurposeThe present study investigates the connection between company investments in intellectual capital (IC) and how they translate into financial value. The aim is to test the impact of intangible assets on the firm value and its sustainable growth.Design/methodology/approachThe research employs computation models to determine the sustainable growth rate (SGR) and the firm value (FV), and by using the ordinary least squares (OLS) model through a linear regression assesses the relationship between the dependent variables and expenditures on intangibles like R&D, IT programs and patents. A sample of 42 companies has been selected out of the 78 listed at Bucharest Stock Exchange (BSE), based on the appropriateness of the information disclosed in the financial reports for the period 2016–2019.FindingsThe results show that intangibles classified as innovative competences (R&D and Patents) do not have a positive impact on SGR and FV in listed companies from Romania. Moreover, R&D has a negative and significant effect on FV, while IT Programs have a positive and significant impact on FV, but not on the SGR. Variables categorised as economic competencies (Brands, Shares held in associates and jointly controlled entities) and firm structure-specific variables (Leverage, Firm Performance) seem to have a significant effect on SGR and FV. Shares held in associates and jointly controlled entities is the variable that can have the biggest impact when it comes to FV for companies listed at BSE.Research limitations/implicationsDue to non-disclosure of specific information by some companies, or lack of investments in intangibles the sample had to be reduced and does not cover all listed companies.Practical implicationsCompanies listed on the Regulated Market from the Bucharest Stock Exchange should maintain their scale of liabilities at a reasonable level when financing intangible assets in order to ensure corporate long-term and sustainable development. Also, these companies should maintain awareness about the importance of intangible assets and invest more in specific sub-components, in order to sustain competitive advantage. Recognizing the roles of intangibles, managers need to develop strategies to invest in profitable intangibles by reasonably allocating their limited resources, in order to achieve sustainable growth and increase company success.Originality/valueStudies concerning the relation between investments in intangibles and sustainable growth rate and firm value of listed Romanian companies are very scarce. This paper reveals new research, never before undertaken, concerning expenditures on intangibles by Romanian companies and the valuation of such investments on Bucharest Stock Exchange.

The relationship between knowledge-based economy and fraudulent financial reporting

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abbas Koolivand ◽  
Mahdi Salehi ◽  
Meysam Arabzadeh ◽  
Hassan Ghodrati
Keyword(s):  
Financial Markets ◽  
Financial Reporting ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Fraudulent Financial Reporting ◽  
Content Type ◽  
Knowledge Based ◽  
Robust Testing ◽  
Knowledge Based Economy ◽  
The Relationship

Purpose This paper aims to assess the relationship between a knowledge-based economy and fraudulent financial reporting. Design/methodology/approach The study is descriptive-correlation based on published information from enlisted firms on the Tehran Stock Exchange during 2013–2019 with a sample of 178 firms (1,246 observations). The method used for hypothesis testing is linear regression using the panel data. Findings The results show that a knowledge-based economy is associated negatively and significantly with financial reporting. Moreover, robust testing has also examined the hypotheses (including fixed effects, OLS and t + 1) that confirmed the study’s preliminary results. Originality/value As the study was carried out in the emergent financial markets, like Iran, to figure out the relationship between knowledge-based economy and financial reporting, it can provide helpful information for the practitioners in this field.

scholarly journals Intellectual Capital and Its Disclosure on Firm Value

2021 ◽  
Vol 10 (1) ◽  
pp. 86-95
Author(s):  
I Nyoman Wijana Asmara Putra ◽  
Ni Made Dwi Ratnadi
Keyword(s):  
Intellectual Capital ◽  
Firm Value ◽  
Banking Industry ◽  
Positive Impact ◽  
Stock Exchange ◽  
Secondary Data ◽  
Annual Reports ◽  
Qualitative And Quantitative ◽  
Coding Scheme ◽  
Structural Capital

Intangible assets, such as information, are becoming increasingly essential to companies. Intellectual capital is another term for knowledge assets. The aim of this study is to find empirical evidence of the influence of intellectual capital and intellectual capital disclosure on firm valuation, as well as to identify the types of disclosures made by the banking industry listed on the Indonesia Stock Exchange from 2015-2019. The data used in the analysis were secondary data from annual reports. A six-way numerical coding scheme determines the disclosure item index. With 36 disclosure objects, the disclosure categories are divided into three categories: structural capital, human capital, and external capital. Content analysis and multiple linear regression are two data analysis methods. The results of the analysis show that an average of 49.91 percent is expressed in the form of a narrative, 16.44 percent is in the form of a combination of qualitative and quantitative, 7.53 percent is in the form of numbers and 1.44 items are expressed in the form of monetary units (rupiah). Meanwhile, an average of 24.33 percent of items of disclosure were not disclosed. Intellectual capital disclosure has a positive impact on firm value, while intellectual capital has no impact. According to research, investors in the banking industry consider intellectual capital disclosure when making investments.

The relationship between intellectual capital and financial statements readability: the role of management characteristics

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahdi Salehi ◽  
Hassan Mohammadzadeh Moghadam ◽  
Zohreh Hajiha
Keyword(s):  
Regression Model ◽  
Intellectual Capital ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Hypothesis Test ◽  
Financial Statements ◽  
Multiple Regression Model ◽  
Content Type ◽  
The Relationship

Purpose The present study aims to investigate the relationship between intellectual capital and the readability of financial statements with the mediating role of management characteristics of companies listed on the Tehran Stock Exchange. In other words, this research tries to find the answer to whether intellectual capital can positively affect the readability of financial statements. Design/methodology/approach A multivariate regression model was used to test the hypotheses for this purpose. The research hypotheses were tested using a sample of 1,309 observations listed on the Tehran Stock Exchange from 2012 to 2018 and a multiple regression model based on panel data and fixed-effects models. Findings The results indicate that intellectual capital has a positive and significant relationship with the readability of financial statements, which means that with increasing intellectual capital in companies, financial statements’ readability also increases. Based on the hypothesis test results, it has been determined that narcissism, accrual and real earnings management have a negative effect on the relationship between intellectual capital and the readability of financial statements. Originality/value Since the present study examines such an issue in emerging markets, it provides users, analysts and legal entities with useful information about management’s inherent and acquired characteristics that significantly impact the purchase of audit opinion. This study’s results also contribute to developing science and knowledge in this field and close the literature gap.

Consequences of corporate sustainability reporting: evidence from an emerging market

2020 ◽  
Vol 62 (3) ◽  
pp. 243-265
Author(s):  
RMNC Swarnapali
Keyword(s):  
Financial Reporting ◽  
Firm Value ◽  
Stock Exchange ◽  
Emerging Market ◽  
Earnings Quality ◽  
Corporate Sustainability ◽  
Market Value ◽  
Sustainability Reporting ◽  
Content Type ◽  
Sustainability Disclosure

Purpose The purpose of this paper is to discover whether corporate sustainability disclosure has a potential impact on the market value and earnings quality of firms in an emerging market. Design/methodology/approach The data were collected from 220 companies listed in the Colombo Stock Exchange (CSE) in Sri Lanka during the period 2012-2016. Firm value proxies by Tobin’s Q, while earnings quality proxies by discretionary accruals (DAC). The study is premised on value-enhancing theory for firm value and transparent financial reporting perspective for earnings quality. Regression analyses are executed on the panel data to achieve the study objectives. Findings The results reveal a positive relationship between sustainability reporting (SR) and firm market value, accepting the value-enhancing theory while rejecting the value-destroying theory. This finding suggests that investors pay a premium in the financial markets for firms that perform in an environmentally and socially responsible manner, compared to firms that do not perform in a similar manner. In the same vein, the results reveal that sustainability disclosure and DAC are negatively and significantly associated, resulting in high-quality earnings. The result is consistent with the transparent financial reporting hypothesis, which is also in line with the managers’ integrity motivation. Originality/value This is the first study investigating the consequences of SR that is specific to the Sri Lankan context. Owing to the sparse studies on consequences of SR, this study contributes significantly to the extant literature by broadening the geographical coverage to include a developing country setting.

Do intellectual capitals matter to firm value enhancement? Evidences from Taiwan

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yensen Ni ◽  
Yi-Rung Cheng ◽  
Paoyu Huang
Keyword(s):  
Intellectual Capital ◽  
Firm Value ◽  
Stock Exchange ◽  
Emerging Market ◽  
Customer Relationship ◽  
Strategic Decisions ◽  
Content Type ◽  
Data Resource ◽  
Customer Capital ◽  
The Impact

PurposeThe purpose of this study is to find evidence of the impact of intellectual capital on firm value, and, in turn, enhance the existing literature which lacks consensus on it. By employing some distinctive proxies for human capital, innovation capital, customer capital and process capital, this study might provide valuable information for firms to make strategic decisions.Design/methodology/approachThis study uses Tobin's Q to represent firm value and various variables to be the proxies for intellectual capitals. By utilizing firm-year observations, this study applies panel data models first, and then Petersen regression models for further investigation to enhance the robustness of the empirical results.FindingsFirm value is affected positively by the average net profit per employee as well as goodwill and intangible assets. This is because firms having employees with abundant knowledge will possess advantage for innovation, and the excellent reputation, a part of goodwill for oriental firms, would encourage people to consume and invest more.Research limitations/implicationsThe constraint of data resource is the main limitation. With the limited scales and as an emerging market of Taiwan Stock Exchange, it is not confirmed whether the results are appropriate for the developed markets. Nevertheless, firms should make efforts on developing intellectual capital and corporate governance for operating businesses with competitiveness and safety.Originality/valueSince capable employees enhance the innovation, innovation improves customer's satisfaction and good customer relationship increases the sales; this study illustrates that for expanding businesses, firms should make more efforts on developing intellectual capital.

scholarly journals Intellectual capital disclosure practices of financial institutions in an emerging economy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Syed Abdulla Al Mamun ◽  
Alima Aktar
Keyword(s):  
Financial Institutions ◽  
Intellectual Capital ◽  
Design Methodology ◽  
Stock Exchange ◽  
Emerging Economy ◽  
Content Type ◽  
Strategic Resources ◽  
Depth Analysis ◽  
External Capital ◽  
Practical Implications

Purpose The purpose of this study is to investigate the intellectual capital disclosure (ICD) practices of financial institutions in an emerging economy of Bangladesh. Design/methodology/approach Based on 93 items of intellectual capital categorized into internal capital, external capital and human capital, ICD index is developed for 53 financial institutions listed in Dhaka Stock Exchange. This study uses descriptive statistics to analyze ICD practices, and parametric and non-parametric tests to analyze the variation of ICD practices in terms of different categories as well as in terms of different sectors. Findings Results indicate that more than 70% of ICD items are generally not disclosed by financial institutions in Bangladesh. The highest of 36% of external capital disclosure items are disclosed, whereas the lowest of 18% of human resource capital elements are disclosed. Furthermore, results find the significant variability of ICD practices in terms of different intellectual capital categories and in between banking companies and non-banking financial institutions. Practical implications Findings have critical implications for managers, policymakers and regulators for setting appropriate strategies and regulations for improving the level of ICD, which, in turn, may reduce the information asymmetry problems of financial institutions as well. Originality/value In-depth analysis about variability of ICD practices creates value in the ICD literature by highlighting strategic priority of financial institutions to disclose information about the strategic resources in unique emerging economic settings such as Bangladesh.

scholarly journals The Influence of Intellectual Capital on Firm Value towards Manufacturing Performance in Indonesia

2015 ◽  
Author(s):  
Euphrasia Susy Suhendra
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Firm Value ◽  
Structural Equation ◽  
Stock Exchange ◽  
Value Added ◽  
Secondary Data ◽  
Market Valuation ◽  
Annual Reports ◽  
Manufacturing Companies

The aim of this study is to analyse the influence of intellectual capital on firm value through firm performance (profitability, productivity, market valuation and growth). Intellectual capital is measured by using a Value Added Intellectual Coefficient (VAIC™). Firm value is measured by Tobin's Q. The financial performance consists of Return on assets (ROA), Asset turn over (ATO), Market to Book Value (MB) and Earnings per Share (EPS). Data from this study was obtained from financial statements and annual reports of manufacturing companies that are taken from the Indonesia Stock Exchange. The sample of this study is manufacturing companies listed on the Indonesia Stock Exchange during the year of 2011-2013 for 37 companies. The types of data used are secondary data in the form of annual reports by the manufacturing companies. Empirical analysis is conducted by using Structural Equation Modelling (SEM). The results of this study indicate that Intellectual capital has a significant effect on profitability, market valuation and growth. Intellectual capital does not significantly affect productivity and firm value. Market valuation significantly affects the firm value. Profitability, productivity and growth do not significantly affect firm value. Furthermore, Intellectual capital which is intervened by the firm performance has a positive effect on firm value.

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