Examining the Effect of Intellectual Capital on Economic Value Added (EVA) of Companies

Abstract

Nowadays, with the transition from the Industrial economy to the knowledge based economy, unnoticeable forms of capital that are often called intellectual capital is playing a developing role in companies’ performance alongside other productive factors. In recent years, because of the importance of the intellectual capital in creating and enhancing the value of organizations, many researchers have been conducted on its effect on different economic, financial, and stock market factors whose major results reveal the positive role of intellectual capital in companies’ performance. This research focuses on the effect of intellectual capital on economic value added (EVA). In this research, to evaluate the intellectual capital the value added intellectual coefficient model (VAIC) has been used (Pulic, 2004). The data has been extracted from the financial data of companies listed in Tehran Stock Exchange between the years 1384 to 1388 that have been analyzed in 649 firm-years. Using correlation and regression analysis, results show that value added intellectual coefficient as efficiency index of intellectual capital has a positive effect on the companies’ economic value added. Furthermore, the positive effect of VAICs’ components except the human capital efficiency (HCE), on the economic value added was proved.