Intellectual Capital Efficiency Research Articles

Unlocking high-growth potential: does intellectual capital efficiency drive European entrepreneurial ventures?

PurposeThis paper investigates the influence of intellectual capital (IC) efficiency and its components – human capital efficiency (HCE), structural capital efficiency (SCE) and capital employed efficiency (CEE) – on the growth paths of small and medium-sized enterprises (SMEs) and their likelihood of becoming high-growth firms (HGFs).Design/methodology/approachDrawing on the resource-based view (RBV), our study reveals a positive relationship between IC efficiency and the likelihood of becoming HGFs. Using a longitudinal dataset of 554,076 firm-year observations corresponding to approximately 79,158 European SMEs from 2012–2019, our study employs probit regression to examine the impact of IC efficiency on the probability of becoming an HGF. To investigate the impact of IC efficiency across the growth rate distribution, we conduct further analyses via generalized least squares.FindingsThe results show that IC efficiency positively influences the growth paths of small entrepreneurial ventures and their likelihood of experiencing high-growth episodes.Practical implicationsFor practitioners, the findings underscore the importance of investing in IC to enhance the growth process of entrepreneurial firms and increase their likelihood of achieving HGF status. Investments in IC can maximize growth potential and competitiveness, informing strategic decision-making.Social implicationsPolicymakers should consider the critical role of IC in promoting SME growth and formulate policies that encourage the development of IC among entrepreneurial firms. Such initiatives can stimulate economic growth, innovation and job creation across European economies.Originality/valueThis study contributes to the literature by focusing on entrepreneurial firms and examining how IC efficiency drives their transition to HGF status. This study provides empirical evidence across several European contexts over an extended period, emphasizing the role of IC efficiency in shaping the growth paths of entrepreneurial firms.

Impact of intellectual capital on financial competitiveness in context of listed Indian healthcare enterprises

Purpose This study aims to determine impact of Intellectual Capital (IC) and its constituents in impacting Financial Competitiveness (FC) of Standard & Poor’s Bombay Stock Exchange Healthcare index constituents for years 2013–2023. Design/methodology/approach This research work used Modified Value-Added Intellectual Coefficients model to gauge IC, whilst an index has been used to apprehend alterations in FC of enterprises. Generalised method of moments (GMM) model was used to determine association between IC and FC of these enterprises. Findings Results demonstrated that IC in entirety had a notable role in FC of healthcare firms. Results showed that human and relational capital had an affirmative role, while structural capital, capital employed and innovation capital had adverse roles in competitiveness. Research limitations/implications This study provides important contributions to academicians, researchers, management, directors and policymakers by equipping them for preparing a roadmap for future performances. Outcomes imply that IC and its segments must be efficaciously managed in the highly knowledge intensive and intricately interconnected healthcare sector, to establish greater competitive acumen thereby rendering improved and superior results. Originality/value This work focusses in lesser researched Indian healthcare sector, scrutinising association between IC efficiency and FC for years 2013–2023.

HUMAN CAPITAL AND PROFITABILITY: CASE of TURKISH BANKING SECTOR

This study aims to examine the effect of human capital on profitability of Turkish banking sector by a panel data covering 2009.q1-2022.q4. Throughout this aim, a research model based on a dependent variable as return on equity is set up. The independent variable to be focused is the Human Capital Efficiency Coefficient -mostly considered as the most significant sub-coefficient of the Value-Added Intellectual Coefficient Methodology developed by Ante Pulic (2004)- to measure intellectual capital efficiency. Besides, three control variables are included in the model to proxy balance sheet structure, assets quality and liquidity. Levin-Lin-Chu (LLC), Im-Pesaran-Shin (IPS) and Augmented Dickey Fuller (ADF) Fisher panel unit root tests, and Pedroni (1999) panel co-integration test are conducted in the econometric analyses to test the stationarity and co-integration among the series. Long term co-integration coefficients are estimated by Fully Modified Ordinary Least Squares (FMOLS) methodology proposed by Pedroni (2000). The empirical findings indicate the existence of a statistically significant and positive relationship between human capital and profitability; and statistically significant and negative relationships among human capital and assets quality, and human capital and liquidity. Another finding is that there exists no statistically significant relationship between human capital and balance sheet structure.Levin-Lin-Chu (LLC), Im-Pesaran-Shin (IPS) and Augmented Dickey Fuller (ADF) Fisher panel unit root tests, and Pedroni (1999) panel co-integration test are conducted in the econometric analyses to test the stationarity and co-integration among the series. Long term co-integration coefficients are estimated by Fully Modified Ordinary Least Squares (FMOLS) methodology proposed by Pedroni (2000). The empirical findings indicate the existence of a statistically significant and positive relationship between human capital and profitability; and statistically significant and negative relationships among human capital and assets quality, and human capital and liquidity. Another finding is that there exists no statistically significant relationship between human capital and balance sheet structure.

A machine learning analysis of the value-added intellectual coefficient’s effect on firm performance

Purpose Recently, machine learning (ML) methods gained popularity in finance and accounting research as alternatives to econometric analysis. Their success in high-dimensional settings is promising as a cure for the shortcomings of econometric analysis. The purpose of this study is to prove further the relationship between intellectual capital (IC) efficiency and firm performance using ML methods. Design/methodology/approach This study used the double selection, partialing-out and cross-fit partialing-out LASSO estimators to analyze the IC efficiency’s linear and nonlinear effects on firm performance using a sample of 2,581 North American firms from 1999 to 2021. The value-added intellectual capital (VAIC) and its components are used as indicators of IC efficiency. Firm performance is measured by return on equity, return on assets and market-to-book ratio. Findings The findings revealed significant connections between IC measures and firm performance. First, the VAIC, as an aggregate measure, significantly impacts both firm profitability and value. When the VAIC is decomposed into its breakdowns, it is revealed that structural capital efficiency substantially affects firm value, and capital employed efficiency has the same function for firm profitability. In contrast to the prevalent belief in the area, human capital efficiency’s impact is found to be less important than the others. Nonlinearities are also detected in the relationships. Originality/value As ML tools are most recently introduced to the IC literature, only a few studies have used them to expand the current knowledge. However, none of these studies investigated the role of IC as a determinant of firm performance. The present study fills this gap in the literature by investigating the effect of IC efficiency on firm performance using supervised ML methods. It also provides a novel approach by comparing the estimation results of three LASSO estimators. To the best of the author’s knowledge, this is the first study that has used LASSO in IC research.

Improving Financial Performance through Financial Risk and Intellectual Capital

This research aims to analyze the influence of financial risk and intellectual capital on financial performance and the influence of financial risk and intellectual capital on financial performance. This research method is explanatory research and causality research design. The population in this research is all manufacturing companies listed on the Indonesia Stock Exchange from 2019 to 2021. The data analysis technique uses path analysis with two substructure equations and testing classical assumptions. This research method is descriptive analysis research. Research data uses secondary data obtained from information in the annual reports of each manufacturing company on the Indonesia Stock Exchange during the research period with data analysis techniques using path analysis. This research shows that financial risk significantly and negatively affects the company's financial performance. The use of capital originating from debt has a negative impact. The company experienced a reduction in its profit target because it had an obligation to pay interest on debt. The greater the use of leverage, the more significant the reduction in the rate of return on its capital. Intellectual capital significantly and positively affects a company's financial performance. Intellectual capital efficiency is substantially and positively related to a company's financial performance. In the future, it is hoped that the company's financial performance will be achieved through effective risk management policies and maximum utilization of intellectual capital, which will impact increasing company value.

The relationship between intellectual capital efficiency and firms’ dividend policy: Do CEO characteristics matter?

The financial challenges facing the Jordanian economy require careful attention and strategic responses. Addressing these challenges may necessitate increased investment. This study explores the relationship between intellectual capital efficiency and firms’ dividend policies and the potential impact of CEO characteristics on this relationship. An analysis was based on data from 90 Jordanian service and manufacturing companies from 2015 to 2019. The study employs the value-added intellectual capital coefficient (VAIC) to measure intellectual capital efficiency and uses the dividend payout ratio to represent dividend policy. The findings indicate a positive relationship between VAIC and dividend policy, suggesting that companies with higher intellectual capital efficiency tend to distribute higher dividends. However, CEO characteristics, such as age, tenure, and educational background, do not significantly affect this relationship. These results imply that strong corporate governance mechanisms are likely in place, ensuring effective decision-making processes and protecting stakeholders’ interests. By focusing on intellectual capital, firms can enhance their operational performance and attractiveness to investors, indirectly supporting economic stability.

Efficiency evaluation of intellectual capital for value creation: a case study of the semiconductor industry in Taiwan

PurposeThis study constructs an efficiency evaluation framework for assessing the human, structural and relational capital in the semiconductor industry of Taiwan. Furthermore, we analyze whether there are significant differences in efficiency across different levels concerning the industry supply chain (upstream, midstream and downstream), employee service tenure, capital scale and company establishment years.Design/methodology/approachThis study focuses on Taiwanese semiconductor companies, utilizing data sourced from the Taiwan Economic Journal (TEJ) Database for the period spanning 2017 to 2021, encompassing a total of five years. Due to the nondisclosure of intangible asset values by all companies, an effort was made to ensure a comparable baseline by excluding companies with incomplete or missing data. Finally, empirical analysis was conducted on a sample of 64 companies using the dynamic network data envelopment analysis method.Findings(1) Overall efficiency demonstrates structural capital as the most prominent, followed by relational capital, while human capital shows relatively poorer efficiency. (2) To enhance the efficiency of intellectual capital, priority should be given to improving the efficiency of outputs related to intellectual property rights such as patents. (3) The midstream segment exhibits the best efficiency in both structural and relational capital. (4) Companies with longer employee service tenures exhibit superior efficiency in human capital in the long run. (5) Companies with extended establishment years and larger capital scales demonstrate superior efficiency in both human and structural capital.Originality/valueReflecting on past literature, scholars have primarily focused on the relationship between intellectual capital and firm efficiency, often emphasizing the overall efficiency of intellectual capital. However, within organizations, human capital, structural capital, and relational capital are interrelated. This study, for the first time, assesses the efficiency of these three components within an organization. The research addresses the challenges in analyzing the efficiency of intellectual capital and introduces a highly contemporary approach – dynamic network data envelopment analysis (DNDEA). Using the semiconductor industry in Taiwan as a case study, this paper conducts empirical analysis in a captivating and worthy industry. Therefore, the ideas presented in this paper are original.

Empirical Analysis of the Effect of Intellectual Capital Efficiency on Cost of Debt

The main objective of this study was to examine the effect of intellectual capital efficiency on cost of debt of manufacturing companies listed on the floor of the Nigerian Exchange Group from the 2014-2023. The research design adopted for this study was ex post facto, secondary data were used and the population of the study consisted of 62 listed manufacturing companies in Nigeria. The sample size of this study was 27 purposively selected listed manufacturing companies in Nigeria. The data used in this study were analyzed using the Generalized Method of Moment (GMM) regression analysis. The findings of this study revealed that human capital efficiency (HCE), has significant negative effect on cost of debt; relational capital efficiency (RCE) has significant negative effect on cost of debt; and structural capital efficiency (SCE) has significant negative effect on cost of debt of listed manufacturing companies in Nigeria. Based on the above findings, it was concluded that intellectual capital efficiency can significantly impact on the cost of debt of listed manufacturing companies in Nigeria. It was therefore recommended among others that the management of manufacturing firms should develop and maintain strong relationships with creditors and financial institutions to negotiate better credit terms and reduce the cost of debt. It was also recommended that the management of these firms should continue to improve and leverage structural capital to enhance operational efficiencies and lower the cost of debt.

Moderating role of gender diversity in the relationship between intellectual capital efficiency and corporate performance

PurposeIn today’s knowledge-based economy, companies are hugely driven by intangible resources such as intellectual capital. However, whether corporate governance of a company drives intellectual capital is less explored in emerging economies. We examine the impact of intellectual capital efficiency on firm performance for Indian firms, considering the moderating role of board gender diversity.Design/methodology/approachWe have created a framework for panel data analysis and conducted estimation using the dynamic panel data model to control for endogeneity and heteroskedasticity issues. We use alternate performance and gender diversity measures for our sample of top 500 listed companies for a period of six years, that is 2015–2020.FindingsThe results demonstrate a significant positive association between intellectual capital and performance. However, moderating impact of gender diversity on the relationship between intellectual capital and performance is not significant.Practical implicationsThe findings indicate that IC plays a crucial role in a company’s performance, which may boost economic growth. Further, the findings reveal that despite the mandatory quota for women on boards in Indian companies, their impact on IC is subliminal. It may be because the critical mass is yet to be achieved, which should be considered by policy-makers while framing policies in this area.Originality/valueOur study is one of the foremost studies to consider the impact of mandatory gender quotas while examining the association between tangible and intangible firm performance. It makes an incremental contribution to literature to enrich our understanding on the influence of gender diversity on intellectual capital-performance linkages.

IMPACT OF CORPORATE GOVERNANCE ON INTELLECTUAL CAPITAL EFFCIENCY - EVIDENCE FROM SRI LANKAN BANKING SECTOR

The study explores the intricate link between Corporate Governance (CG) factors and Intellectual Capital (IC) efficiency within the Sri Lankan banking sector. It delves into the impact of variables such as Board Size (BSIZE), Board Activity (BACT), Board Independence Composition (BIND), Audit Committee Size (AUDS), and Frequency of Audit Committee Meeting (AUDM) on Intellectual Capital, treating the latter as the dependent variable. For the five years between 2018 and 2022, the research technique comprises a thorough investigation of banking sector company in Sri Lanka, excluding three banks. The goal of the study is to obtain understanding of the connection between CG variables and IC efficiency through secondary data analysis using data from stock market transactions and audited financial statements. The main analytical tools are descriptive statistics and regression modeling, which enable a detailed comprehension of the relationship between CG dynamics and IC efficiency. Through a detailed examination of these variables across time and across different financial institutions, the study seeks to illuminate the ways in which CG practices impact the creation and application of IC in the banking industry. In the conclusion, the results of this study are important not only for scholars but also for professionals and decision-makers in the banking sector in Sri Lanka. The study provides significant insights that can guide strategic decision-making, governance reforms, and resource allocation within banking institutions, ultimately leading to improved organizational efficiency and long-term sustainability. This is achieved by revealing the complex relationships between Corporate Governance and Intellectual Capital.

Moderating Impact of Managerial Ownership on Intellectual Capital and Value of Listed Deposit Money Banks in Nigeria

This study examined the moderating impact of managerial ownership on intellectual capital and firm’s value of listed deposit money banks in Nigeria. Ex-post facto research design was adopted to define the structure and strategy of the study, while the target population was all the listed deposit money banks in Nigeria as at 31st December, 2022 which were 14 in number. Out of the 14 banks 11 were purposively chosen based on their complete annual reports and accounts over the period of the study (2012-2022). Panel regression analysis was adopted to analyze the collected data. Thus, the study found a direct positive impact of structural capital efficiency, and innovation capital efficiency on the value of the bank. However, human capital efficiency was found to have negative but significant impact on the value of the banks, while capital employed efficiency revealed positive but insignificant direct impact on the value of the selected banks. Furthermore, managerial ownership was found to have positive and significant moderating impact on structural capital efficiency, human capital efficiency and firms’ value, while managerial ownership revealed negative and insignificant moderating impact on innovation capital efficiency and the value of the banks. Therefore, the study concluded that managerial ownership have positive and significant moderating impact on intellectual capital and firms’ value of listed deposit money banks in Nigeria. This signifies that, increase in the number of equity share owns by managers and directors would improve banks investment in intellectual capital, hence enhance banks value. Therefore, this study recommends that; in order for listed deposit money banks in Nigeria to maximize firms’ value through intellectual capital efficiency, the banks should allow managers to acquire equity shares in the banks.

Do board characteristics matter in the relationship between intellectual capital efficiency and firm value? Evidence from the Nigerian oil and gas downstream sector

PurposeThe purpose of this study is to investigate the moderating effects of board characteristics such as board size, chief executive officer duality, number of board meetings, and diversity, on the relationship between intellectual capital efficiency and firm value in the Nigerian oil and gas downstream sector.Design/methodology/approachWe collected time-series cross-sectional data from eight (8) downstream-sector oil and gas companies quoted on the Nigerian Exchange Group for the period 2004–2020. We analysed the data using Prais–Winsten regression with panel-corrected standard errors.FindingsOverall, our results show no significant direct relationship between the modified value-added intellectual coefficient and our two measures of firm value (Tobin’s Q and Price Earnings Ratio (PER)). However, the board size is found to moderate the intellectual capital efficiency–PER relationship significantly and negatively, whereas board diversity significantly positively moderates the association between the modified value-added intellectual coefficient and PER. Our multi-theory framework, which blends clean surplus, agency, stakeholder, and resource-based theories is found to be relevant in underpinning this study.Research limitations/implicationsThe research relies on 17-year panel data for eight downstream-sector oil and gas companies. Consequently, future research within intellectual capital efficiency in Nigeria could incorporate related sectors like midstream and upstream to enable comparability and expand generalization.Practical implicationPolicymakers may adopt the study findings to serve as a robust empirical base to demand improved board diversity as a catalyst for boosting the potency of the intellectual capital efficiency-firm value relationship.Originality/valueFirstly, to the best of our knowledge, this study is the pioneer attempt to use board characteristics as moderators of the relationship between intellectual capital efficiency and firm value. Secondly, we develop and use a novel theoretical framework that combines clean surplus, agency, stakeholder, and resource-based theories to underpin the study.

Intellectual capital and subscription rate: an empirical investigation in the Indian initial public offering market

PurposeThis study aims to investigate the impact of intellectual capital (IC) on investor demand (i.e. subscription rate). The rise of the knowledge economy motivates us to investigate how the value added by the IC of the issuing firms affects potential investors’ responses.Design/methodology/approachThis study investigates the impact of IC on initial public offering (IPO) subscription rates using 234 IPOs from March 31, 2010 to March 31, 2021. This study uses multivariate regression, including year and industry dummies, and conduct robustness tests with industry subsamples. Additionally, this paper uses an alternative demand proxy (i.e. listing day returns) and two-staged least squares to address endogeneity.FindingsThis paper documents an inverse relationship between investor demand and human capital efficiency alongside a positive correlation between investor demand and structural capital efficiency. Additionally, IC efficiency positively affects listing day returns, with individual investor demand significantly driven by institutional investors.Originality/valueThis study uses Pulic’s (2000) methodology for measuring IC and examines whether it reduces information asymmetry in the IPO market and encourages investors to subscribe to an issue. This study holds significant implications for IPO issuing firms, investors and regulators regarding the IC disclosure in the prospectus.

Probing the impact of intellectual capital on SME efficiency: the role of business model innovation

PurposeThis study explores the mechanism by which intellectual capital (IC) [i.e. human capital (HC), structural capital (SC) and relational capital (RC)] influences small and medium-sized enterprise (SME) efficiency in the presence of business model innovation (BMI) as a mediator.Design/methodology/approachData collection is conducted through a survey completed by 319 owners and top managers of SMEs operating in the manufacturing sector in three cities in Pakistan. A simple random sampling method is used. A structural equation modeling artificial neural network (SEM-ANN)-based approach is applied to evaluate the role of IC predictors. The mediation results are authenticated using PROCESS.FindingsThe results indicate that HC, SC and RC significantly influence SME efficiency and BMI. Furthermore, BMI fully mediates the relationship between human capital and SME efficiency, while partially mediating the relationship between structural capital and SME efficiency, as well as between SC and SME efficiency.Originality/valueThis study pioneers research into the link between IC and SME efficiency. It contributes to the literature by defining IC as an antecedent of SME efficiency. It further contributes to the literature by defining IC as an antecedent and BMI as an intervening variable of SME efficiency.

Does Intellectual Capital Efficiency Translate into Financial Performance for Islamic Banks in Indonesia? Evidence from the Pre-Pandemic Period

This study investigates the determinants of financial performance in Indonesian Islamic banks, focusing on the Financing to Deposit Ratio (FDR) and Capital Adequacy Ratio (CAR) as key indicators. Utilizing data from Bank Syariah Indonesia (BSI) and Bank Muamalat Indonesia (BMI) between 2016 and 2020, the research employs Ordinary Least Squares (OLS) regression analysis to examine the influence of Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), and Capital Employed Efficiency (CEE) on FDR and CAR. The findings reveal that while CEE has a statistically significant negative relationship with FDR, the model for CAR lacks a statistically significant fit. This research contributes to understanding the role of intellectual capital in Islamic banking performance and offers insights for stakeholders in the Indonesian Islamic finance sector, with implications for the post-pandemic era.

Effects of Ownership Structure on Intellectual Capital: Evidence from Publicly Listed Banks in Bangladesh

This study explored the impacts of ownership structure (OS) on intellectual capital (IC) and its components. Data were gathered from 31 Dhaka Stock Exchange-listed banks for five years, from 2017 to 2021, consisting of 155 observations as balanced panel data. The study used the modified value-added intellectual coefficient (MVAIC) model to track the IC efficiency. The robust fixed effects model was employed for regression analysis to test the hypotheses. The research found that sponsor director ownership is negatively associated with the MVAIC, human capital efficiency (HCE), and structural capital efficiency (SCE) but positively with relational capital efficiency (RCE). High institutional and public ownership are positively linked with SCE but negatively with RCE. Foreign ownership is only positively associated with banks’ MVAIC and HCE. The regression results showed that high institutional ownership (IO) significantly enhanced the MVAIC and HCE. Foreign and public ownership positively influenced banks’ MVAIC, HCE, and capital employed efficiency (CEE) but negatively impacted RCE. The findings of this study will help banks’ policymakers with ownership mixes for the optimum utilization of banks’ resources. Management may assess IC’s efficiency level for proper supervision and use of knowledge resources to boost bank profitability. Also, the findings will help investors make prudent investment decisions. This is the first study to focus on OS and IC with diverse elements in Southeast Asia, especially Bangladesh, an emerging market.

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.

The impact of intellectual capital on financial performance: An empirical investigation of Indian technology industry

This paper examined the association of intellectual capital and physical capital with financial performance (productivity and profitability) and market valuation (MB) in technology sector of India. IC efficiency of the companies was measured through Value added intellectual coefficient (VAIC) methodology. To examine the relationship of intellectual capital with financial performance and market valuation, the panel regression models have been employed in the study. The results evinced that value added intellectual capital coefficient (VAIN) has no relationship financial performance measures (ATO and ROA) and market valuation (MB) respectively. The results also found that physical and financial capital (VACA) has a significant influence on productivity and profitability of the organization. It is divulged that Indian technology-intensive firms still depend on tangible assets for organizational efficiency. This study is an eye opener for policy makers, government officials and other stakeholders to analyze the factors for non-existence relationship of intellectual capital with financial performance and market valuation respectively.

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

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