The Impact of Continuous Education on Intellectual Capital and Market Value of Companies: A Work In Progress Paper

Abstract

The growth of technological modernization, associated to increased specialization, has contributed to important changes in the structure and positioning of companies, with a demand for more sophisticated and more innovative instruments of intervention. Intellectual capital constitutes the source which can meet these demands and is capable of generating wealth. It is found in people, structures and customers. In this new economy, information and knowledge – the main components of intellectual capital – are the main factors in the creation of value, producing intangible assets of great importance in companies. Thus, knowledge constitutes the most important resource for companies. This paper focuses on the theme of continuous education and its repercussion on the intellectual capital of companies, as well as on its market value. Thus it aims to analyse the existing correlations between these variables. The study will focus on companies quoted on the Portuguese Stock Market in the period (2011-2013).To analyse the relationship between investment in continuous education and the market value relevance of the company’s intangibles, will be used Tobin’s Q (Andriessen, 2004). There is empirical evidence that intellectual capital increases companies’ market value. Studies have shown that investment in training results in an increase in worker productivity which, in turn, is translated into an increase in financial performance and, consequently, on market value of the companies. The implementation of policies for continuous training is a way of disseminating individual and organizational knowledge, which can be translated into an increase in the human and intellectual capital of companies.