Intellectual Capital and Value Creation in the Furniture Manufacturing Sector in Brazil

Abstract

The study of intangible assets has been attracting growing attention of investors and companies in the last years, mainly due to its potential effect in the creation of value. This interest raises important questions regarding models to evaluate, assess and measure intangible assets and to link its impact on financial variables. In special, one aspect of intangibles seems to be most important in a knowledge-based economy: Intellectual capital. Although a unanimity about the definition of intellectual capital is yet to be reached, it seems that there is an agreement regarding its relevance for the companies. In this research, we investigate, through an analysis of panel data, the model proposed by Pulic (2000), which involves the human capital and the structural capital. Using data from 2000 to 2006 of the Brazilian Institute of Geography and Statistics that conducts the Annual Industrial Research, regression models were analyzed to verify the relationship between the efficiency in the use of the intellectual capital and profitability of the companies in Brazil. Using constructs defined by Public (2002) and considering a study of an unbalanced panel of 966 observations of the Furniture Manufacturing sector, the following hypotheses were tested: (i) there is a positive relationship between value creation and intellectual capital, (ii) there is a positive relationship between value creation and stock of intellectual capital, (iii) there is a positive relationship between value creation and efficiency of the employed capital , (iv) there is a positive relationship between value creation and efficiency of the human capital, (v) there is a positive relationship between value creation and efficiency of the structural capital. For the Brazilian sector of Furniture Manufacturing, the results suggest a positive and statistically significant relationship between flow and stock of intellectual capital in the creation of value, in static models based on minimum square errors.