Purpose – The purpose of this paper is to analyse the role of value added (VA) as an indicator of intellectual capital (IC), and its impact on the firm's economic, financial and stock market performance.Design/methodology/approach – The value added intellectual coefficient (VAIC™) method is used on 300 UK companies divided into three groups of industries: high‐tech, traditional and services. Data require to calculate VAIC™ method are obtained from the “Value Added Scoreboard” provided by the UK Department of Trade and Industry (DTI). Empirical analysis is conducted using correlation and linear multiple regression analysis.Findings – The results show that companies' IC has a positive impact on economic and financial performance. However, the association between IC and stock market performance is only significant for high‐tech industries. The results also indicate that capital employed remains a major determinant of financial and stock market performance although it has a negative impact on economic perform...

Analysing value added as an indicator of intellectual capital and its consequences on company performance

Purpose – The purpose of this paper is to examine the intellectual capital (IC) performance of the Australian Financial Sector for the period 2006‐2008. It also aims to examine the relationship between IC performance and the financial performance of the financial sector.Design/methodology/approach – The value added intellectual coefficient (VAIC) approach developed by Pulic is used to determine the IC performance of the Australian financial sector. The required data to calculate different constituents of IC was obtained from the annual reports of Australian Financial Sector companies.Findings – The value creation capability of financial sector in Australia is highly influenced by human capital. About two thirds of the sample companies have very low levels of intellectual capital efficiency. The performance of various components of VAIC and overall VAIC differs across all subsectors in the financial sector. Investment companies have high value VAIC due to higher a level of human capital efficiency, as comp...

Intellectual capital and financial performance: an evaluation of the Australian financial sector

https://cyberleninka.org/article/n/1349262.pdf

Intellectual capital and financial performance: A study of the Turkish Banking Sector

Purpose – The purpose of this paper is to study the relationship between intellectual capital (IC) and performance of pharmaceutical firms in India. The secondary objective is to propose and test modified models of Value Added Intellectual Coefficient (VAIC™) method. Design/methodology/approach – Data on 22 large pharmaceutical firms collected for empirical investigation. Return on assets and return on sales are performance variables. IC and its components – human capital, structural capital and relational capital (RC), are predictor variables. Three extended and modified VAIC™ models (e-VAIC™) are proposed. Multiple regression technique is applied on pooled data to draw inferences. Findings – Results show instances of positive relationship between IC and performance variables. RC, the new variable, does not demonstrate statistically significant relationship with performance variables. Research limitations/implications – Due to inadequate reporting of IC and its components, availability of data on various...

Intellectual capital and performance of pharmaceutical firms in India

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

Purpose – The purpose of this paper is to examine the long‐run relationship between the Indian capital markets and key macroeconomic variables such as interest rates, inflation rate, exchange rates and gross domestic savings (GDS) of Indian economy.Design/methodology/approach – Quarterly time series data spanning the period from January 1995 to December 2008 has been used. The unit root test, the co‐integration test and error correction mechanism (ECM) have been applied to derive the long run and short‐term statistical dynamics.Findings – The findings of the study establish that there is co‐integration between macroeconomic variables and Indian stock indices which is indicative of a long‐run relationship. The ECM shows that the rate of inflation has a significant impact on both the BSE Sensex and the S&P CNX Nifty. Interest rates on the other hand, have a significant impact on S&P CNX Nifty only. However, in case of foreign exchange rate, significant impact is seen only on BSE Sensex. The changing GDS is ...

Impact of macroeconomic indicators on Indian capital markets

Purpose – The purpose of the present study is to make a comparison of intellectual capital performance between Indian pharmaceutical and textile industry. Further, the study attempts to investigate association between intellectual capital efficiency with financial performance and market valuation.Design/methodology/approach – An empirical study was carried out on data collected from CMIE database Prowess. VAIC was calculated on a select sample of 105, pharmaceutical companies and 102, textile companies. Correlation and OLS regressions models are used on panel data for the analysis.Findings – Results indicated that profitability and intellectual capital are positively associated but no significant relationship is observed between intellectual capital with productivity and market valuation in both industries. In spite of the growing importance of intellectual capital, its reflection is not proportionally observed in the financial performance of the select sample of companies.Research limitations/implication...

IC performance of Indian pharmaceutical and textile industry

The present paper is an attempt to re-examine the applicability of Lintners (1956) dividend policy in banking sector in India. The banks, listed on any of the Stock Exchange in India, constitute the sample for the present study. Here, a cross-sectional analysis have been carried out from the year 1996 to 2006 across ownership pattern of banks in India. The results are found in line with the Lintner model. The findings offer evidence that the dividend policy of Public Sector Banks (PSBs) is more stable than that of Private Banks (PBs). The results indicate that the major determinants of current dividend are lagged dividend and the current earnings in case of both PSBs and PBs. The above evidence is almost similar to those markets in developed countries such as the US. The study is also found giving support to the argument of information content of dividend in the context of dividend proceeds. Hence, dividend policy can be used as a signaling device by the managements of banks.

Examining Application of Lintners Dividend Model in Indian Banking Industry

This paper examines the relationship between Financial Reporting of Intellectual Capital and Companyâ€™s Performances in Indian Information Technology Industry. For the purpose of this study, sixty companies listed on NSE were taken for a period of 1999-00 to 2008-09. Value Added Intellectual Co-efficient (VAICTM) method developed by Pulic (1998) was used for the analysis of the data. The present study uses VAICTM model and regression equation for the evaluation of intellectual capital and their relationship with productivity, profitability, and market valuation of the companies. The result of the study supports the hypothesis that profitability of the company can be explained by the intellectual capital. However, there is no significant association of intellectual capital with productivity and market capitalization of the companies for the selected time period of year 1999-00 to 2008-09.

Financial Reporting of Intellectual Capital and Company’s Performance in Indian Information Technology Industry

The present study re-examines the applicability of Lintner’s (1956) and Britain (1966) path breaking analyses of dividend policy. The banks listed on National Stock Exchange, and declaring dividend consistently from the last eleven years constitute the sample for the present study. Here, we have carried out a cross-sectional analysis for the years 1996 to 2006. The results are found in-line to the Lintner model as well as Britain cash flow model. The findings offer evidence that stable dividend policy is followed by commercial banks in India. The results indicate that the major determinants of current dividend are lagged dividend and the current earnings. The above evidence is almost similar to those in developed markets like the U.S. The study is also found giving support to argument of ‘information content of dividend’ in the context of dividend proceeds. Hence, dividend policy can be used as signaling device by the management of the banks.

Karam Pal

Papers

Impact of macroeconomic indicators on Indian capital markets

IC performance of Indian pharmaceutical and textile industry

Examining Application of Lintners Dividend Model in Indian Banking Industry

Financial Reporting of Intellectual Capital and Company’s Performance in Indian Information Technology Industry

Factors Influencing Dividend Policy Decisions in Banking Sector: An Indian Evidence