Intellectual Capital Efficiency Research Articles

The Effect of Intellectual Capital Efficiency on Malaysian Firm Performance: A Dynamic Panel Estimation

The Effect of Intellectual Capital Efficiency on Malaysian Firm Performance: A Dynamic Panel Estimation

Az intellektuális tőke mérési lehetőségei egy vállalati példán keresztül

Our research aims to examine the “invisible value” found at UPC Magyarország Kft. Since Vodafone Magyarország Nyrt. announced the acquisition of UPC Magyarország Kft. in 2020. Our research is aimed at using different methods to determine the invisible assets, intellectual capital, and added value, which cannot be determined directly from the financial statements of UPC Magyarország Kft. Since the financial statements prepared based on accounting principles follow the principle of prudence, many assets (mainly intangible assets) are not shown in the financial statements, so they only become visible after the moment of acquisition. Three different methods were used to measure intellectual capital, then the results were compared. The three methods use different points of view to measure intellectual capital and approach the concept of intellectual capital from other points of view. The CIV method shows us the lack of intellectual capital in relation to the industry or the surplus value; The EVA indicator explicitly shows us the intellectual capital size; and the VAIC method the efficiency of intellectual capital.

Unveiling the Nexus Between Intellectual Capital Efficiency and Financial Performance in Malaysia's Healthcare Sector Amidst the Covid-19 Crisis

Unveiling the Nexus Between Intellectual Capital Efficiency and Financial Performance in Malaysia's Healthcare Sector Amidst the Covid-19 Crisis

Does Intellectual Capital Efficiency Translate in the Post-pandemic Era for Islamic Banks in Indonesia?

PURPOSE: This study aims to identify the key determinants of financial performance in Islamic banks, specifically focusing on the Financing to Deposit Ratio (FDR) and Capital Adequacy Ratio (CAR). Additionally, it explores the applicability of these determinants in a post-pandemic environment. DESIGN/METHODOLOGY/APPROACH: The research utilizes data from two prominent Indonesian Islamic banks, Bank Syariah Indonesia (BSI) and Bank Muamalah Indonesia (BMI), for the pre-pandemic period (2016-2020). Ordinary Least Squares (OLS) regression analysis is employed to investigate the influence of Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), and Capital Employed Efficiency (CEE) on both FDR and CAR. FINDINGS: The model analyzing determinants of FDR explains a significant portion (48.99%) of the variance. Interestingly, only Capital Employed Efficiency (CEE) exhibits a statistically significant negative relationship with FDR. Conversely, the model for CAR lacks a statistically significant fit. ORIGINALITY: This research contributes by examining the impact of intellectual capital components (HCE, SCE, CEE) on financial performance ratios (FDR, CAR) within the Indonesian Islamic banking context. RESEARCH LIMITATIONS: The study is limited to data from two Indonesian banks during a specific timeframe. Further research with a broader sample size and encompassing the post-pandemic era would enhance generalizability. PRACTICAL IMPLICATIONS: The findings offer valuable insights for stakeholders in Indonesian Islamic banking, particularly regarding the importance of efficient capital utilization for managing financing activities and maintaining healthy FDR levels. SOCIAL IMPLICATIONS: By enhancing the financial performance of Islamic banks, this research indirectly contributes to the development of a more robust Islamic financial system that caters to the ethical and social banking needs of the community.

Intellectual capital efficiency: the missing piece to your corporate governance and profitability puzzle

PurposeThe purpose of this study is to evaluate the synergy of corporate governance (CG) with intellectual capital (IC) and to assess the moderating effect of profitability indicator on the aforementioned synergy using agency theory, resource-based view theory and theory of financial ratios as conceptual frameworks.Design/methodology/approachThe sample includes 72 companies with a six-year data set drawn from the KSE 100 Index companies of Pakistan. In addition, the study adopts Pulic’s model to compute the efficiency of IC. The research uses fixed-effect panel regression for analysis and two-stage least squares regression (2SLS) to address endogeneity issues in the estimation process.FindingsThe results showcased that chief executive officer duality possesses negligible impact on IC efficiency (ICE), while independent directors, audit committees and board size tend to attain a strong association with IC. Moreover, it postulates that the moderation of return on equity strengthens the path between all governance components and ICE significantly.Originality/valueThe research uses a 2SLS regression analysis to explore how CG practices take hold on the effectiveness of IC in Pakistan while taking into account the moderating impact of profitability. The findings add to the body of knowledge on the value that strong governance practices have on businesses and society.

PENGARUH STRUKTUR KEPEMILIKAN DAN ESG TERHADAP EFISIENSI MODAL INTELEKTUAL

The progress of the current era of globalization is slowly changing the company's view from a labor-based business to a knowledge-based business. The knowledge-based business is based on the ability and proficiency of the company's individuals. This is what makes the company focus on increasing intellectual capital. Several factors, such as ownership structure and Environmental, Social and Governance (ESG) activities, are thought to influence the efficiency of intellectual capital because both reflect the entity's intellectual capital. This research aims to determine the effect of ownership structure (managerial ownership, institutional ownership, foreign ownership, government ownership) and ESG activities on the intellectual capital efficiency of non-financial sector companies listed on IDX in 2018-2022. The purposive sampling technique was used and resulted in 78 companies that met the criteria. The research was conducted using multiple linear regression analysis via SPSS 23. The results of the research show that managerial ownership does not affect intellectual capital efficiency. The research results also reveal that institutional ownership and ESG activities have a positive effect on intellectual capital efficiency. On the other hand, foreign ownership and government ownership have a negative effect on intellectual capital efficiency. The results of the research provide an overview for companies regarding the influence of ESG activities on company reputation, contribution, and quality. On the other hand, ownership variables can provide an overview of the company regarding the influence of share ownership on company decisions.

Adjusted Value Added Intellectual Coefficient and Firm Value with Good Corporate Governance as a Moderator : Evidences from Commercial and Sharia Banking in Indonesia

This study was to investigate the relationship between intellectual capital and firm value in commercial and sharia banks in Indonesia using good corporate governance as a moderator. This review included commercial and sharia banks still up in the air by the creator recorded on the Indonesia Stock Trade (IDX) from the period 2018 to the period 2021, utilizing the Directed Relapse Examination (MRA) technique which is checked on from the fiscal summaries, by delivering 17 organizations as an example and tried utilizing with SPSS. The results obtained from the examination demonstrate the way that intellectual capital can have a significant effect on firm value and good corporate governance as a moderator can significantly strengthen the impact of intellectual capital on firm value, utilizing the A-VAIC model as an estimation. In order for commercial and sharia banks in Indonesia to increase the firm value, they need to develop an efficient method for fully disclosing intellectual capital, supported by the existence of good corporate governance as an efficient system that will attract stakeholders' attention. This study used the A-VAIC (Adjusted Value Added Intellectual Coefficient) as a measurement of intellectual capital efficiency.

Does intellectual capital efficiency improve islamic banking performance? The moderating effect of islamic governance

Research aims: This paper aims to examine the moderating effect of Islamic governance on the relationship between intellectual capital efficiency (ICE) and Islamic bank performance.Design/Methodology/Approach: The population for this study covered Islamic banks in Indonesia. Purposive sampling was performed, and statistical analysis was conducted using moderating regression analysis by selecting among the common, fixed, and random effects models. The statistical tool utilized was E-Views 12.Research findings: The primary finding of this study is related to the positive moderating effect of structural capital efficiency on the relationship between intellectual capital and Islamic banking performance. Furthermore, Islamic governance could not strengthen the influence of human capital efficiency and capital employed efficiency on the performance of Islamic banks.Theoretical contribution/Originality: To the best of the authors’ knowledge, no other research has examined whether intellectual capital significantly affects the performance of Islamic banks with a moderating effect on Islamic governance in Indonesia.Practitioner/Policy implication: The results of this research provide input for the Sharia Supervisory Board to pay attention to the management of intellectual capital in Islamic banks and encourage Islamic banks to increase the value of intangible resources, capabilities, and asset knowledge to create and maintain competitive advantages in Islamic banks.Research limitation/Implication: This study focused only on Indonesian Islamic banks; hence, future research should be extended to Islamic insurance and microfinance.

Intellectual capital and market performance of Nigerian Companies

This study is carried out on intellectual capital efficiency and the market value of Nigerian quoted companies. The specific objectives were to: determine the influence of human capital efficiency on market value of the listed Nigerian companies; examine the influence of structural capital efficiency on market value of the listed Nigerian companies; and evaluate the influence of capital employed efficiency on market of the listed Nigerian companies firms in Nigeria. The data were sourced from 2018 to 2022 annual audited accounts of the 117 companies quoted on the Nigerian Exchange Group. The regression technique was employed to analyse the data. The findings showed that capital employed efficiency positively influenced market value throughout the five years but the human capital efficiency and structural capital efficiency have mixed results. Human capital efficiency and structural capital efficiency were both positively and negatively influenced market value of the sampled Nigerian companies for the periods of observation. The study thus concluded that intellectual capital influenced the market value of the sampled Nigerian companies and provided the recommendation that the sampled companies should improve their investments on intellectual capital resources (such as staffs’ training, staff welfare) and physical assets.

Does intellectual capital efficiency measured by modified value-added intellectual coefficient affect the financial performance of insurance companies in Ethiopia?

Insurance company managers and shareholders should be conscious of the effect of intellectual capital efficiency and its components on financial performance. The purpose of this study is to examine the role of intellectual capital efficiency and its components on the financial performance of insurance companies. To achieve study objectives Modified value-added intellectual coefficient is adopted to measure the effect of intellectual capital efficiency. The study adopted an explanatory research design with an arrangement of secondary data analysis via document analysis, quantitative approach, and deductive method of inquiry. Panel data was used with a sample of 14 insurance companies from 2012-2022. Descriptive and regression analyses were performed to analyze the data using STATA version 15.0. Econometric model estimation procedures and multiple regression assumptions were tested accordingly. The random effect regression result revealed that the value-added intellectual capital and its component human capital and capital employed efficiency have a positive significance association with financial performance. Whereas, relational capital efficiency and structural capital efficiency do not have a significant contribution to the financial performance of insurance sectors in Ethiopia. The findings of this study contribute to the theoretical and practical understanding of the relationship between intellectual capital efficiency and financial performance in the context of insurance companies in Ethiopia.

Does corporate governance spur bank intellectual capital in an emerging economy? A system GMM analysis from Ethiopia

PurposeThe current study aims to explore the impact of corporate governance (CG) mechanisms, as measured by board size, board meeting frequency, board gender diversity, number of board subcommittees, board remuneration, size of audit committee, and audit committee meeting frequency, on bank intellectual capital (as calculated by the modified value-added intellectual coefficient (M-VAIC) and its components (human capital efficiency (HCE), structural capital efficiency (SCE), and relational capital efficiency (SCE)).Design/methodology/approachPanel data is extracted from the financial and other internal reports of 14 commercial banks and the National Bank of Ethiopia for the period 2011–2022. A two-step system generalized method of moments (2SYS-GMM) was used to account for the unobserved endogeneity and heteroscedasticity problems.FindingsThe empirical findings suggest that board size and board meeting frequency have a negative and significant impact on all IC performance measures. Besides, audit committee size has a negative and significant effect on HCE, SCE, and M-VAIC of the banking industry in Ethiopia. Moreover, board remuneration has a significant positive relationship with IC efficiency (HCE, SCE, and M-VAIC). Also, audit committee meeting frequency has a positive and significant effect on the HCE of banks. However, board gender diversity and the number of board subcommittees have not made statistically significant contributions to IC performance.Research limitation/implicationThe study is limited in its use of seven dimensions of CG and future studies can use other alternative accounts for CG variables. Next, this study applies only to commercial banks; hence, future studies can include other financial as well as non-financial organizations such as insurance companies, microfinance institutions, manufacturing, and other sectors.Practical implicationsThis study contributes to helping the regulators and practitioners of the banking industry improve the existing standards and guidelines for CG practices to strengthen their IC performance. The findings may also give input for policymakers to integrate the intellectual capital in the decision-making process for policy formulation and implementation for the establishment of a robust banking sector.Originality/valueConsidering the modified value-added IC coefficient (M-VAIC) and 2SYS-GMM models, this research is the first study to analyze the relationships between CG and banks’ IC in Ethiopia.

Revealing the moderating impact of spatial context on the relationship between intellectual capital efficiency and the sustained success of family SMEs

This study investigates the behavioral patterns of Small and Medium-Sized Family Firms (SMFFs) in terms of translating intellectual capital efficiency into economic performance while considering their geographical location. The findings underscore the paramount importance of effective intellectual capital management in driving business performance, particularly for SMFFs, drawing upon the knowledge-based perspective. In line with behavioral theory, this study also provides empirical evidence demonstrating that SMFFs located in rural areas adeptly navigate locational challenges by effectively translating their Added Value Intellectual Coefficient (VAIC) into sustainable performance, thereby outperforming their urban counterparts. This phenomenon, referred to as SMFF heterogeneity, can be attributed to their profound emotional connection and deep-rooted bonds with their local communities, intensifying their commitment to the regional milieu. Consequently, their success becomes intricately linked with the spatial context they inhabit. In this regard, this research offers significant practical and theoretical contributions to the understanding of SMFFs, shedding light on the interplay between intellectual capital, geographic location, and sustainable performance in the intricate landscape of family firms

The Impact of Intellectual Capital and Corporate Governance on Bank Performance in Vietnam

Purpose – The importance of corporate governance and intellectual capital on financial performance has largely been ignored in emerging markets. The banking sector is considered to accumulate a higher level of intellectual capital and to adopt a better corporate governance system. We aim to examine the contribution of these two important aspects to the performance of Vietnam's banking sector. Design/methodology/approach – This paper utilizes data collected from the annual reports of banks in Vietnam from 2011 to 2021. The modified value-added intellectual coefficient (MVAIC) model is adopted to measure a bank's intellectual capital efficiency. In addition, the generalized method of moments is utilized to ensure the robustness of the findings. Findings – Empirical results strongly confirm that intellectual capital positively contributes to a bank's performance. In terms of corporate governance, the findings indicate that board size, board remuneration and major shareholders holding more than 20 percent of outstanding shares are the three most important factors that contribute positively to banks' performance. In addition, human capital efficiency and capital employed efficiency positively impact a bank's profit. Practical implications – Our study provides valuable evidence and implications for policymakers in managing and enhancing corporate governance and intellectual capital efficiency within the Vietnamese context, particularly in the banking sector. Originality/value – To the best of our knowledge, this is the first empirical paper conducted to examine the contribution of corporate governance and intellectual capital on banks’ performance in Vietnam.

Does The Efficient Use of Visible Intellectual Capital Determine the Profitability in the Automotive Industry?

Abstract Intellectual capital (IC) is one of the core determinants of the value of companies, and value creation for stakeholders as well as improvement of the competitiveness of the companies. Effective management of all visible and invisible elements of the total IC is extremely important for business success, since the effective providing, creating, developing and efficient use of intellectual resources affects various business performances, such as income, market share, net profit, and profitability of the company quantified by various performance measures of Return on assets (ROA) and Return on equity (ROE). One part of the total IC is disclosed and visible in the assets side of the balance sheet (Intellectual assets and Goodwill - Iag), while the other, is undisclosed and invisible (Human capital - Hc and Structural and relational capital - SRc). Efficiency in the usage of all these elements of IC has an impact on profitability. The purpose of this research (based on 12 leading companies in the automotive industry from 2010 to 2019) is to examine the interdependence, as well as the influence, of the Efficiency in the use of Intangible assets and goodwill (Eiag) on various rations of ROA and ROE using the EIC (the Efficiency of Intellectual Capital) model for calculation of the Eiag indicator. Although there are numerous studies that use the VAIC methodology to research the interdependence and impact of the efficiency of certain elements of IC on business performance, as well as, in particular, on profitability, the originality of this paper is based on an investigation of the interdependence and influence of Eiag on profitability (ROA and ROE), which is not the case with the studies of other researchers so far, because Pulić’s VAIC methodology does not separate the visible IC component i.e. Iag. The outcomes of this study confirm a positive relationship between the efficiency in the use of intangible assets and goodwill (Eiag) and profitability (ROA and ROE), as well as the growing impact of Eiag on profitability indicators (ROA and ROE). The findings imply the extreme importance of effective and efficient management of all elements of intellectual assets that are visible on the assets side of the balance sheet, taking into account the evident impact on profitability.

Intellectual capital efficiency and competitive advantage of firms: an empirical analysis

This paper empirically tests the strategic importance of intellectual capital for firms and assesses its impact on their market returns. The study builds on the premise that intellectual capital provides a firm competitive advantage over other firms, which then translates into superior market returns. The sampling frame for the study constitutes of Indian firms listed on the Bombay Stock Exchange’s index for medium-sized companies (BSE Midcap). Accordingly, seven-year data is drawn from authentic sources such as the Prowess-IQ database of the Centre for Monitoring Indian Economy (CMIE) and the company annual financial statements. For ascertaining the extent of the intellectual capital efficiency of firms, the Value-Added Intellectual Coefficient (VAIC) model, first proposed and conceptualized by Ante Pulic has been adopted in this study. The excess rate of return that a firm earns above the average rate of return prevalent in the market, alpha (α), is used as an indicator of the firm’s competitive advantage and a measure of superior performance in the market. Results of the analysis provide irrefutable evidence in support of the fundamental premises and affirm that intellectual capital is the root of competitive advantage, which bestows a firm with higher-than-normal returns on investments.

Modified of Intellectual Capital and Financial Performance: Empirical Evident From Indonesia

The study aims to investigate the effect of Intellectual Capital on the Financial Performance of Banking Industries in Indonesia. Based on the data of 47 Banks listed on the Indonesia Capital Market in 2021, by using multiple regression to examine the impact of modified intellectual capital on financial performance. This study uses the purposive sampling method. Intellectual capital is measured by VAIC, RCE, and InnovationCE, and Financial Performance using Return on Assets (ROA). The findings show that CEE and HCE have a positive influence on ROA, but unfortunately, SCE, RCE, and InCE do not affect the ROA. This finding shows that the bank needs to improve its skills in managing intellectual capital, especially related to SCE, RCE, and InCE. The more they manage their intellectual capital efficiency, in order to increase their financial performance.

Intellectual capital efficiency, institutional ownership and cash holdings: a cross-country study

PurposeThis study aims to investigate the roles of intellectual capital efficiency and institutional ownership on cash holdings and their speed of adjustment.Design/methodology/approachUsing a sample of 432 firm-year observations of tourism-listed companies, three measures of cash holdings are used as dependent variables and intellectual capital efficiency and institutional ownership as independent variables. The financial data is collected from the S&P Capital IQ database for the period 2015–2020. Two system-generalized methods of moment estimation are used for the robustness checks of the results.FindingsThe study provides evidence that an increase in intellectual capital efficiency in tourism firms results in lower cash holdings. The research findings also report that characteristics such as firm size, age and market-to-book value ratio are associated with cash holdings. Furthermore, institutional ownership in these firms did not affect the cash holdings. The results also confirm the existence of a target cash holding level to which the tourism firms attempt to converge. These results are robust to the alternative proxy of cash holding and endogeneity tests.Research limitations/implicationsThe study uses intellectual capital efficiency measured by the model proposed by Pulic. Alternative measures of intellectual capital can be included in future studies. Future research can also investigate the impact on cash holdings before and during the pandemic for tourism companies. The study is limited to the impact of institutional ownership; thus, research can be extended to consider other types of ownership.Practical implicationsThe findings of this study indicate that tourism companies should take into account the impact of intellectual capital efficiency on their cash holding decisions. The industry uses a specific financial management strategy in light of better efficiency and possibly values the opportunity cost of holding more cash. Additionally, regulators should re-examine the role of institutional ownership in tourism firms, as it was found to have no impact on cash holdings. The regulators may need to consider other factors, such as firm size and age, when developing policies and regulations to ensure that tourism firms have adequate cash holdings.Originality/valueThis study adds to the body of knowledge on the factors that influence cash management and ideal cash levels for the tourism industry. The examination of the effect of intellectual capital on cash holdings is a novel contribution, filling a gap in the existing literature. The findings on the speed of adjustment towards optimal cash holdings also provide support for the trade-off theory.

The impact of intellectual capital efficiency on value creation in video game industry—An evidence from Taiwan

In light of the metaverse’s vast expansion, it’s a crucial intellectual platform that’s transforming the video game industry and spurring creative innovation and technological advancement. Considering the distinctive niche that Taiwan occupies within the realm of the video game industry, this study uses a total of 11 video game companies in Taiwan as samples. The study spans a period of 16 years, from 2007 to 2022, and utilizes the random effect regression model for analysis. The study results illustrate that intellectual capital efficiency exerts varying contributions to the creation of value across different corporate value indicators within the video game industry. Among the factors, HCE, SCE, and CEE demonstrate the highest explanatory power for ROE, reaching up to 82.23%. Following this, they account for 73.57% of the variance in market share, but only a meager 13.67% for Tobin’s Q. This study is the empirical evidence that different methods of measuring intellectual capital and various definitions of value creation in an industry may lead to divergent results and managerial implications in intellectual capital research. Hence, it is worthwhile for subsequent studies to continue clarifying and delving deeper into these aspects.

Intellectual Capital Valuation of DSE-Listed Non-financial Companies in Bangladesh

Intellectual capital (IC) is an organization's vital resource that helps the firm survive by confirming competitive edges. However, the valuation of IC resources is a challenging task. IC valuation is essential to employ the knowledge resource efficiently. Hence, the study aims to evaluate the IC resources of non-financial companies in Bangladesh and compare the IC performance between manufacturing and service firms. The study also explores the year-wise trend study and industry-based IC performance study. Data have been collected from secondary sources from 69 DSE-listed non-financial companies in Bangladesh from 2017 to 2021, comprising 345 company-year observations. The Modified Value Added Intellectual Coefficient (MVAIC) methodology has been adopted to reflect IC value. Independent Sample t-tests and graph and chart analyses have been performed to fulfill the study objectives. Results have shown that human capital is the primary driver of IC resources, and it dominates Intellectual Capital Efficiency (ICE) and then the overall IC efficiency (MVAIC) score. Human and structural resources utilized by Bangladeshi companies are better than those of relational and tangible capital. Service companies have better handled human and structural resources, but manufacturing companies have better used relational and employed capital. Research has also observed a declining trend of IC resources of the sampled companies. Telecommunication, Fuel and power, and Textile industries have better used IC resources. However, the tannery industry still needs to do so. The research contributes to resources-based theory by confirming the value of invisible resources, which supports business executives, policy-makers, managers, and potential and existing investors to make the right decisions. Further research may be conducted using an extended sample size, comparing financial and non-financial sectors or comparing among industries or valuation techniques like EVA, KCE, and CIV.

Intellectual Capital Valuation of DSE-Listed Non-financial Companies in Bangladesh

Intellectual capital (IC) is an organization's vital resource that helps the firm survive by confirming competitive edges. However, the valuation of IC resources is a challenging task. IC valuation is essential to employ the knowledge resource efficiently. Hence, the study aims to evaluate the IC resources of non-financial companies in Bangladesh and compare the IC performance between manufacturing and service firms. The study also explores the year-wise trend study and industry-based IC performance study. Data have been collected from secondary sources from 69 DSE-listed non-financial companies in Bangladesh from 2017 to 2021, comprising 345 company-year observations. The Modified Value Added Intellectual Coefficient (MVAIC) methodology has been adopted to reflect IC value. Independent Sample t-tests and graph and chart analyses have been performed to fulfill the study objectives. Results have shown that human capital is the primary driver of IC resources, and it dominates Intellectual Capital Efficiency (ICE) and then the overall IC efficiency (MVAIC) score. Human and structural resources utilized by Bangladeshi companies are better than those of relational and tangible capital. Service companies have better handled human and structural resources, but manufacturing companies have better used relational and employed capital. Research has also observed a declining trend of IC resources of the sampled companies. Telecommunication, Fuel and power, and Textile industries have better used IC resources. However, the tannery industry still needs to do so. The research contributes to resources-based theory by confirming the value of invisible resources, which supports business executives, policy-makers, managers, and potential and existing investors to make the right decisions. Further research may be conducted using an extended sample size, comparing financial and non-financial sectors or comparing among industries or valuation techniques like EVA, KCE, and CIV.