Intellectual capital (IC) is considered to be a wealth generator and driver of financial performance thus creating competitive advantage and sustainability in business. This paper empirically investigates the impact of IC on financial performance and sustainable growth in the Korean manufacturing industry. Multiple regression models are applied with data collected from 390 manufacturing companies listed on the Korean Stock Exchange during 2012–2016. The results of the analysis show that IC has a positive impact on financial performance and companies’ sustainable growth. In addition, companies’ performance and sustainable growth are positively related to physical capital, human capital (HC), and relational capital (RC). RC is found to be the most influencing factor. Finally, innovative capital captures additional information on structural capital (SC) which negatively affects the performance of Korean manufacturing companies. The results extend the understanding of IC in creating corporate value and building sustainable advantages in emerging economies.

Intellectual Capital, Financial Performance and Companies’ Sustainable Growth: Evidence from the Korean Manufacturing Industry

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).,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.,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.,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.,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.

The impact of intellectual capital on firm performance: a study of Indian firms listed in COSPI

The purpose of this paper is to propose an extended and modified value-added (VA) intellectual coefficient (VAIC) model, which includes intellectual capital (IC) components which were missing in the original VAIC approach. The proposed model has been used to explore the relationship between IC and firm performance for Turkish manufacturing firms on a more detailed level.,Multiple regression analysis has been employed to identify the IC components, which predict the performance of the firm and the moderating effect of some IC components on IC components–firm performance relationship. Data are required to calculate the IC components, and firm performance variables have been obtained from the financial reports of the Turkish manufacturing firms for the period 2003–2013.,According to the results for Turkish manufacturing sector innovation capital efficiency has a moderating effect on the relationship between structural capital efficiency (SCE) and profitability, meaning, depending on an increase in R&D expenses, the effect of SCE on profitability also increases. On the other hand, it has been found that innovation capital efficiency has a direct impact on firms’ productivity. The results also showed that IC efficiency components have a moderating role on the relationship between capital employed efficiency and profitability.,There might be a time lag until the effect of R&D investments can be observed in firms’ performance. However, this lagged impact of innovation capital and also other IC components on future firm performance has not been investigated due to concerns related to sample size.,The proposed model differs from the original VAIC model in three ways: it, namely, includes two additional IC components, customer capital (CC) and innovation capital. It explores the moderating effect of innovation capital on structural capital–firm performance relationship and the moderating effect of IC components on employed capital–firm performance relationship. As the last difference, it proposes an alteration in the VA calculation due to newly added IC components, CC and innovation capital.

Intellectual capital and firm performance: an extended VAIC model

The purpose of this paper is to explore and compare the extent of intellectual capital (IC) and its four components in high-tech and non-high-tech small and medium-sized enterprises (SMEs) operating in China’s manufacturing sector, and to examine the relationship between IC and the performance of high-tech and non-high-tech SMEs.,The study uses the data of 116 high-tech SMEs and 380 non-high-tech SMEs listed on the Shenzhen stock exchanges during 2012–2016. The modified value added intellectual coefficient (MVAIC) model is used incorporating four components, namely, capital employed, human capital, structural capital and relational capital. Finally, multiple regression analysis is utilized to test the proposed research hypotheses.,The findings of this paper reveal that there is significant difference in MVAIC between high-tech and non-high-tech SMEs. The results further indicate a positive relationship between IC and financial performance of high-tech and non-high-tech SMEs. Specifically, IC is positively associated with firms’ earnings, profitability and operating efficiency. Additionally, capital employed efficiency, human capital efficiency and structural capital efficiency are found to be the most influential value drivers for the performance of two types of SMEs while relational capital efficiency possesses less importance.,This paper will provide a valuable framework for executives, managers and policy makers in managing IC within the Chinese context.,To the best knowledge of the authors, this is the first empirical study that has been conducted on high-tech and non-high-tech SMEs in the manufacturing sector in China.

The impact of intellectual capital on SMEs’ performance in China: Empirical evidence from non-high-tech vs. high-tech SMEs

The purpose of this paper is to examine the causal effect of intellectual capital (IC) performance on financial performance at Thai listed banks.,Data are collected from 16 listed banks in Thailand for the period 1997–2016. This paper uses the value-added intellectual coefficient methodology suggested by Pulic (1998, 2004) to measure IC. This study employs a fixed-effects and random-effects model and generalized method of moments (GMM) estimator to investigate the causal effect of IC on financial performance.,The results show that bank profitability is driven mainly by capital employed efficiency to make a profit. However, human capital efficiency marginally reduces bank profitability in the current period but has positive effects on future profitability.,First, this study does not cover data on foreign banks, which reduces the generalizability of the results. Second, financial statements can be manipulated through accounting adjustments. Lastly, subsequent research should control for more bank characteristics, such as bank ownership, the non-performing loan ratio and R&D expenditure.,To achieve higher future profitability, banks should not only manage their physical and financial capital effectively but also improve employee efficiency.,This paper contributes to the literature on IC in the banking sector in emerging countries. Moreover, this paper is the first to employ the GMM method in the banking context to address possible endogeneity problems.

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Should bankers be concerned with Intellectual capital? A study of the Thai banking sector

Purpose




The purpose of this paper is to analyze the relationship between firms’ intellectual capital (IC), financial performance (FP) and market value (MV) as well as the relationship between ownership concentrations on IC performance.




Design/methodology/approach




A large sample of non-financial listed firms belonging to 14 countries in Western Europe, for the period between 2004 and 2015, was investigated using the GMM system (1998) dynamic estimator and the effect of lagged explanatory variables on firm’s FP and MV.




Findings




The results reveal that IC is an important resource for firms’ value creation. Human capital is found to be a key factor of firms’ wealth. Results show that capital employed efficiency positively impacts on firms’ FP in the short run. The impact of IC components on firms’ MV may not be immediate. The structural capital positively affects firms’ FP in the long run. Also, the results reveal that ownership concentration and owners’ management involvement constrain firms’ IC performance.




Originality/value




The current study contributes to IC research by exploring a large sample of firms across countries in Western Europe using econometric modeling. Considering that the effect of IC on firms’ FP needs time to be realized, thus to be measured, the effect of lagged explanatory variables on performance was tested, using dynamic panel estimators, specifically the GMM system (1998) dynamic estimator.

A European empirical study of the relationship between firms’ intellectual capital, financial performance and market value

https://ubibliorum.ubi.pt/bitstream/10400.6/6898/1/sardo_serrasqueiro%20and%20alves%202018.pdf

On the relationship between intellectual capital and financial performance: A panel data analysis on SME hotels

The purpose of this paper is twofold: first, to analyse the impact of intellectual capital (IC) and growth opportunities on firms’ financial performance as well as the moderating effect of IC on the relationship between growth opportunities and financial performance; and second, to analyse the impact of IC on growth opportunities.,The current study uses a sample of non-financial listed firms consisting of 14 Western European countries for the period between 2004 and 2015. The estimation method used is specifically the Generalised Method of Moments system (1998) estimator, a dynamic panel estimator.,The results reveal that the IC efficiency of the current period has a positive impact on the financial performance of high-, medium- and low-tech European firms. A non-linear relationship was found between growth opportunities and financial performance. Also, findings suggest that the positive relationship between growth opportunities and financial performance is enhanced with the efficient use of firms’ IC. Results indicate that the efficient use of IC in the current period has a greater impact on growth opportunities in high firms. Additionally, results reveal the presence of a non-linear relationship between ownership concentration and growth opportunities.,The current study contributes to the current literature by exploring a sample of firms across Western European countries, which is divided among high-, medium- and low-tech firms. The econometric modelling enables the author to conduct a longitudinal study.

Intellectual capital, growth opportunities, and financial performance in European firms: Dynamic panel data analysis

Purpose




The purpose of this paper is to analyse if capital structure decisions of small- and medium-sized Portuguese firms are in accordance with the predictions of dynamic trade-off theory, more precisely, the speed of adjustment of short-term debt (STD) and long-term debt (LTD) towards the respective target debt ratios.




Design/methodology/approach




Based on two samples of Portuguese firms, 1,377 small-sized firms and 811 medium-sized firms, dynamic estimators were used for the treatment of data obtained from the Amadeus database for the period 2007-2011.




Findings




The results indicate that small- and medium-sized firms adjust their STD and LTD ratios towards the respective target ratios. Small- and medium-sized firms present a high-speed adjustment towards the target STD ratio, suggesting that both types of firm face costs of deviating from the target capital structure, which are, probably, greater than the costs of adjustment associated with STD. However, considering the distance from the target ratio as a determinant of the adjustment speed, the results show the predominance of the negative effect of the costs of adjustment on capital structure adjustment speeds.




Originality/value




The results obtained for the speed of adjustment of STD and LTD, in a recession context, show that for small firms and medium-sized firms, mainly for the former, the costs of external market transactions are prohibitively high, slowing the speed of adjustment towards the target capital structure.

Does dynamic trade-off theory explain Portuguese SME capital structure decisions?

This paper seeks to analyse the relationships between listed high-tech firms' financing choices and intellectual capital (IC). It also analyses the impact of ownership concentration on IC investments in high-tech firms. The data set was gathered from the Datastream database for a sample of listed high-tech firms in 14 Western European countries for the period between 2004 and 2015. The data set has an unbalanced panel structure, with the number of years of observations on each firm varying between 3 and 12. We use dynamic panel data models, the GMM system (1998) estimator. Results suggest that internal finance and equity issues are positively while debt is negatively related to IC in high-tech firms. High-tech firms seem to rely on equity issues and internal finance, avoiding debt to fund IC assets. Ownership concentration is negatively related to IC investments in high-tech firms. To the authors' knowledge, this is the first study exploring the relationships between financing choices and IC in high-tech firms. The findings also contribute to the literature by analysing the impact of ownership concentration on IC investments of high-tech firms.

Filipe Sardo

Papers

A European empirical study of the relationship between firms’ intellectual capital, financial performance and market value

On the relationship between intellectual capital and financial performance: A panel data analysis on SME hotels

Intellectual capital, growth opportunities, and financial performance in European firms: Dynamic panel data analysis

Does dynamic trade-off theory explain Portuguese SME capital structure decisions?

Intellectual capital and high-tech firms' financing choices in the European context: a panel data analysis