Relational Efficiency Research Articles

The Impact of Intellectual Capital and Ownership Structure on Firm Performance

Even though several studies have been done on intellectual capital, ownership structure, and firm performance, their status has remained uncertain in developing countries like Malaysia. Prior studies have generally focused on a single industry and overlooked the input of all Malaysian non-financial firms. This study investigates the impact of intellectual capital, its components, and ownership structure on firm performance. This study employs a balanced panel data examination for the data of 409 non-financial firms from 11 sectors listed on Bursa, Malaysia for five years (2016–2020). The modified value-added intellectual coefficient model was applied to examine the effect of IC efficiency on firm performance. The empirical findings revealed that IC efficiency, human capital efficiency, structural capital efficiency, capital employed efficiency, and relational capital efficiency are positively and significantly related to firm performance. However, physical and structural capital is the most substantial element of intellectual capital efficiency in augmenting profitability. In addition, government and foreign ownership positively affect firm performance. The research will help managers, policymakers, and investors understand how IC investments increase performance and make prudent investment choices in government and foreign ownership firms.

The Impact of Intellectual Capital on Financial Performance of Small and Medium-sized Enterprises

The rapid growth of technologically advanced companies in the knowledge-based economy has driven corporate management to pay more attention to the importance of intellectual capital. Over the last two decades, several Intellectual Capital monetary models have gained in importance, due to the increasing need of firms to administer and control the efficiency of their intangible resources. In this context, the present study is conducted to examine the impact of the value creation efficiency of Intellectual Capital on the financial performance of small and medium-sized enterprises. Through a quantitative approach, this research sample consisted of 23 small and medium-sized enterprises and made use of correlation and multiple regression analysis as methods for treating the ambitioned. The results showed that the value creation efficiency of intellectual capital positively influences corporate financial performance. At last, the inclusion of relational capital efficiency, as well as the relationship examination of Intellectual Capital and other performance measures, are suggestions for future research.

Nexus Between Intellectual Capital and Profitability: Evidence from Listed SMEs in Malaysia

This paper examines the impact of intellectual capital and its components on profitability using the Modified Value Added Intellectual Coefficient (MVAIC) methodology. Data was collected from 26 listed SMEs in Malaysia from 2017-2019 providing 78 observations. This study employed the fixed-effect and random-effect models. The results showed that the MVAIC was significant and positively associated with profitability. Of the four components of the MVAIC, human capital efficiency and capital employed efficiency correlated positively and significantly with profitability. Structural capital efficiency was negatively associated with profitability. While, relational capital efficiency revealed an insignificant association with profitability. Overall, listed SMEs profitability was driven by both intellectual capital and physical capital, however the magnitude of contribution varied. The effect of capital employed efficiency presented a superior relative magnitude in comparison to human capital, structural capital and relational capital suggesting that physical capital was the main drive behind profitability. This study presented a robust theoretical foundation and employed a validated methodology. Therefore, it extends knowledge of intellectual capital among academicians and stakeholders as well as highlights its contribution to value creation. Keywords: intellectual capital, profitability, SMEs, MVAIC models

Intellectual Capital Efficiency and Its Impact on Sustainable Development of Agri-Business Sector in India

Recognizing the importance of IC components, businesses must devise strategies for investing in various IC components while judiciously spending their limited knowledge-based resources. There is a growing demand for research on the link between sustainable development and organization’s intellectual capital. The current research explores the intellectual capital efficiency’s effect on the sustainable growth rate of Indian agri-business firms through modified value-added intellectual capital model. The study adopts a fixed effect regression model to analyze the repercussion of ICE on SGR. The findings of the study reveal that capital employed efficiency exhibits a noteworthy negative impact on sustainable growth of companies, while relational capital efficiency has a noteworthy influence. Human capital efficiency, structural capital efficiency, and innovation capital efficiency do not have significant impact on companies’ sustainable growth rate.

Intellectual Capital Efficiency and Performance of Conventional Banks in Indonesia

This study aims to explain how the influence of Intellectual Capital Efficiency with components of intellectual capital efficiency, namely human capital efficiency, structural capital efficiency and relational capital efficiency with the performance of conventional banks in Indonesia, this study uses a population of conventional banks registered in Indonesia. The sampling technique was purposive sampling in accordance with predetermined criteria and obtained a sample of 100 conventional banks in Indonesia. The method used in this study is to analyze the annual financial statements that have been published at the Financial Services Authority (OJK). This research will be tested using linear regression analysis. The results of this study indicate that Human Capital Efficiency (HCE) has a statistically significant effect on bank performance.

Study of intellectual capital on drugs and pharmaceutical industry of India: Using panel data analysis

Intellectual capital is becoming increasingly important in financial decisions made by managers in the information-based environment. However, only a small portion of a company’s total assets is represented by intangible assets (such as concessions, licenses, patents, and trademarks). The current research investigates the relationship between an organization’s Intellectual capital and its health. A new model — Modified Extended Value-added Intellectual Capital Coefficient — was also proposed. The findings were compared with the two existing models, namely, Value Added Intellectual Coefficient and Modified Value Added Intellectual Coefficient. Panel data regression is used to assess the performance of 25 Indian pharmaceutical and drug companies throughout the period 2010–2019. Human capital efficiency, structural capital efficiency, and relational capital efficiency have been proven to have a substantial positive correlation with return on assets (ROA). In addition, a negative yet significant link exists between organizational capital efficiency and a company’s profitability. Under the Value Added Intellectual Coefficient, human capital and structural capital efficiency do not affect the market value to book value. The market value-to-book value, on the other hand, is positively impacted by capital employed efficiency.

Extending Green Supply Chain Management to the Mining Sector in South Africa: Implications for Corporate Performance

The South African mining sector faces numerous challenges that limit the performance of firms, chief among them environmental management, labour, and operational issues. An important research gap exists on how the adoption of green supply chain management (GSCM) can contribute to the mitigation of some of these challenges. This study investigates the connection between GSCM, employee satisfaction, operational and relational efficiency, and enterprise performance in the mining sector in South Africa. The study employed a quantitative method using a cross-sectional survey design. A structured research questionnaire was used to collect data from supply chain professionals at two leading mining firms based in the North-West Province, South Africa. The collected data were analysed using a structural equation modelling procedure based on the partial least squares technique. The study reveals the positive influence of GSCM on employee job satisfaction, operational efficiency, relational efficiency, and enterprise performance. The study also confirms that relational efficiency and operational efficiency both exert a positive influence on enterprise performance. However, employee job satisfaction exerted no influence on enterprise performance. GSCM itself exerted a direct positive influence on enterprise performance. The application of GSCM in the mining sector should be recognised as part of the solutions to motivating supply chain professionals and stimulating important internal and external efficiencies, leading to the enhanced performance of the firm.

Does Intellectual Capital Efficiency Affect Earnings Quality? Evidence for Jordanian Listed Companies

This paper examines whether Intellectual Capital (IC) efficiency is associated with Earnings Quality (EQ) for Jordanian-listed firms. Using the value-added intellectual coefficient and total accruals models to measure both IC and EQ, a positive and significant association was found between IC efficiency and EQ. Also found were a significant positive relationship between relational capital efficiency and EQ, a significant negative relationship between structural capital efficiency and EQ, and no relationship between human capital efficiency and EQ except in the real estate sector. Those results have implications for the competitive advantage of firms over rivals, corporate management decision-making, and the performance of the Jordanian capital market.

Intellectual Capital Efficiency and Corporate Performance in Jordanian Listed Companies

We examine whether intellectual capital efficiency (IC) shapes the corporate performance of Jordanian listed firms over the period 2009-2018. We document a positive impact of IC on corporate performance that holds across different sectors. Considering the different IC components, we find a positive relationship with corporate performance for both relational capital efficiency (except for the real estate sector) and human capital efficiency (except for the services sector), but find that the impact of structural capital efficiency is mixed. Our evidence points to the fact that Jordanian corporate management has not yet fully exploited the potential of intangible assets.

Environmental, Social, and Governance Information Disclosure and Intellectual Capital Efficiency in Jordanian Listed Firms

In this study, we explore the association between the intellectual capital (IC) efficiency of firms and their voluntary disclosure of environmental, social, and governance (ESG) information, using data on Jordanian listed firms and the value-added intellectual coefficient (VAIC) model with its three components of human, structural, and relational capital efficiency (HCE, SCE, and RCE, respectively). We find that disclosing environmental information is unrelated to IC efficiency, that disclosing governance information is associated with raised IC efficiency through the HCE and RCE components, and that disclosing social information is negatively associated with IC efficiency through the SCE and RCE components. We also find that releasing information on one or two of the three ESG dimensions has a positive effect on IC efficiency. This evidence has implications for the management of intangible assets.

The Effects of Green SCM Implementation on Business Performance in SMEs: A Longitudinal Study in Electronics Industry

The evolution of green supply chain management (GSCM) in small and medium-sized enterprises (SMEs) remains underexplored in the literature. Specifically, this study assesses the changes in the effects of GSCM implementation on employee job satisfaction, operational and relational efficiency, and business performance of SMEs that serve as suppliers to large buying firms. The present study collected survey data from 193 electronics manufacturers in South Korea twice in a seven-year time gap, evaluated the reliability and the validity of individual measures, and employed structural equation modeling (SEM) to test the model hypotheses. The results commonly found in the two studies with the time gap are (1) the positive effects of GSCM implementation on employee job satisfaction and operational and relational efficiency, (2) the positive effects of both operational and relational efficiency on business performance, and (3) the positive relationship between operational efficiency and relationship efficiency. Moreover, the positive effect of employee job satisfaction on business performance is found only in the latter study (Study II). The results suggest that GSCM implementation is a critical factor for SME suppliers to establish sustainable long-term relationships with buying firms in the electronics industry, and it also helps manufacturers improve employee job satisfaction and operational efficiency over time. The present study is believed to enhance an understanding of key factors in association with GSCM that positively influences the business performance of SME suppliers.

Medical resilience and morality: a survey study on the opinions and actions of exemplary family physicians

BackgroundStudies conducted to understand how family doctors develop resilience and deal with the challenges posed by work-related stress, usually have focused on identifying the elements that generate resilience from psychological perspectives and their impact on coping strategies. Few have explored the role that personal qualities and values that traditionally motivate family physicians can play as drivers of well-being and resilience.ObjectivesTo explore attributes that exemplary family physicians (EFP) consider important for their work and the elements that, for them, are source of gratification and resources in the face of the adversities they encounter in their practice.MethodsThis is an exploratory study carried out by online survey. Eighty six doctors regarded as exemplary by their colleagues answered 7 close and 4 open-ended questions that explored their job satisfaction, the elements of their work that reward them, the difficulties and problems they usually encounter, the resources they use to cope with those problems, and the personal qualities they consider central to their work. Four researchers conducted a thematic (deductive and inductive) analysis of the free text responses received. Based on the results obtained, and through an iterative discussion process, the researchers proposed an integrated set of qualities at the core of their professionalism.Results88.4% (76) of the doctors said they were satisfied with their work. However, they face problems (202 comments), including demanding patients, insensitive managers with unshared interests/care goals, excessive paperwork, work overload, or time pressures. Sources of gratification point to personal identity; clinical, relational, and collaborative efficiency; a holistic and comprehensive practice (centred on individuals); and a continuous search for excellence (149) and the root of their resources (135). These elements, in turn, corresponded to the attributes considered essential for the practice of family medicine (131).ConclusionsFor EFPs, certain professional values give meaning to their clinical practice and are a source of well-being and resources. This central focus on professional values and qualities can help for better understand the burnout nature and expand the type of action that promotes resilience. Further studies using a less structured qualitative research will be needed to confirm/expand these results.

Plain language practices of professional writers in Quebec

This article investigates the plain language practices of professional writers in Quebec, using a survey. We contacted 55 professional writers and asked them to complete an online survey about how they apply plain language in their work, and the type of writing assistance they would find useful. We also asked 40 of those writers to carry out a simplification task to see what kind of simplifications they were actually making.
 If the feelings about the reality of the writers’ work is in line with the literature, opinions on plain language guidelines are not. Most writers in our survey find them useful and precise enough, and this contrasts with reported criticisms of such guides. In the simplification task, we noticed that writers focus on the overall understanding of the text, and not only on some linguistic characteristics (as shown in plain language guidelines). The more experienced the writer, the more changes they will make to visual/structural aspects or relational efficiency. Putting the focus on the reader’s needs is their main concern.

Do female directors drive intellectual capital performance? Evidence from Indian listed firms

PurposeThe purpose of this paper is to investigate the significance of board gender diversity (BGD) on the firm's intellectual capital (IC) performance of 272 Indian firms listed on the National Stock Exchange during 2007–2019. Considering the recent regulatory amendment by the Indian regulatory system (Security Exchange Board of India, 2018) which mandates at least one female independent directors on boards of all listed companies.Design/methodology/approachBased on theories and literature reviews, hypotheses were developed. This paper uses the proportion of female director on board and proportion of female independent directors to measure BGD and modified value-added intellectual coefficient (MVAIC) methodology to measure firms' IC performance. Two-step system-generalised method of moment panel data regression analysis has been employed to identify the variables that significantly affect IC performance.FindingsThis paper finds female representation on boards has a significant impact on MVAIC; capital employed efficiency shows the strongest association with female directors on board, followed by structural capital efficiency and human capital efficiency, while relational capital efficiency shows no significant effect. The results further demonstrate that female independent director has a significant but negative impact on IC.Research limitations/implicationsAs the study is limited to the listed firms of an emerging economy with a mandatory female quota for boards. Thus to increase the generalizability of findings, future research can be extended to include all listed and non-listed firms from another emerging economy with a mandatory female quota.Practical implicationsFrom the practical perspective, this study bridges the gap between theory and practice in terms of providing a deeper understanding to the policymakers and Indian regulatory bodies like the Ministry of Corporate Affairs and Securities Exchange Board on the importance of including female members on board as a vital contributing factor for leveraging firm's intangible performance.Originality/valueUsing resource dependency theory and agency, this study extends the literature on IC efficiency and female representation on boards by presenting the research outcome for Indian listed firms. This paper, addressing the recent changes introduced by Indian regulators and using the female independent directors on board, is amongst the first attempts to assess the relevance of BGD and IC performance. This issue has still not been discussed and analysed by researchers in India.

Intellectual capital efficiency and bank performance: Evidence from islamic banks

The purpose of this study is to shed light on the extent of intellectual capital efficiency (ICE) and the relationship of its three components (human capital efficiency, structural capital efficiency, and relational capital efficiency) with Islamic banking performance (in terms of return on assets, return on equity, and Tobin's q) in Muslim countries. We develop hypotheses on this relationship drawing on the resource-based theory. The study employs a two-step system generalized method of moments (2SYS-GMM) estimator to analyze the data collected from 129 Islamic banks in 29 Muslim countries over the period from 2008 to 2017. The study provides evidence that the performance of Islamic banks (IBs) is driven primarily by investment in ICE. The results indicate that structural capital efficiency (SCE) and relational capital efficiency (RCE) are the essential drivers of value in achieving high performance at Islamic banks. The results reveal that human capital efficiency (HCE) negatively affects the performance of IBs. Bank size and foreign ownership are also identified as significant drivers of IBs performance. This study helps IBs to maintain their ICE assets because they are the main drivers for sustaining competitive advantage as well as raising bank productivity. Our findings can help stakeholders and policymakers to recognize the significant components of ICE and a reasonable allocation among them for improving bank performance. To the best of our knowledge, this is the first empirical study to evaluate ICE and its relationship with Islamic banking performance in 29 Muslim countries across the Middle East, South Asia, and Southeast Asia.

On the relationship between intellectual capital efficiency and firm value: evidence from the Nigerian oil and gas downstream sector

We use a multi-theory framework which combines the lenses of clean surplus theory, resource-based theory and stakeholder theory to examine the relationship between measures of intellectual capital efficiency and firm market value. We employ Prais-Winsten regression with panel corrected standard errors to estimate our model. We find that while capital employed and structural capital efficiencies significantly and positively determine firm value, relational capital efficiency's positive effect appears mild. However, human capital efficiency appears to have no relationship with firm value. The significance of our findings is demonstrated by two key contributions to the literature. Firstly, this study is the first of its kind conducted in the Nigerian oil and gas industry. Secondly, our results provide further evidence in support of the clean surplus theory in its function of facilitating the role of accounting numbers in determining and explaining market values. These results are robust to an alternative time-series estimation at aggregate downstream sector level.

Transcultural adaptation and validation of the Persian version of the Brief Emotional Intelligence Scale.

Background:Increasing the level of emotional intelligence (EI) is seen as a strategy for improving both relational quality and efficiency at work. As of today, there was no validated Persian brief instrument for evaluating EI. To fill this gap, this article was aimed to investigate the validity and reliability of the Persian version of the Brief Emotional Intelligence Scale (BEIS-10).Materials and Methods:A methodological cross-sectional study was conducted among 201 Persian-speaking individuals. These individuals were selected from different parts of Iran using the convenience sampling method. Translation of the BEIS-10 was conducted by employed forward–backward method. Internal consistency was evaluated by Cronbach's α, and for test–retest reliability, the intraclass correlation coefficient (ICC) was employed. The construct validity was investigated by confirmatory factor analysis (CFA).Results:The Persian version of BEIS-10 indicates a good test–retest reliability (ICC = 0.612, 95% confidence interval: 0.384 and 0.769) as well as internal consistency (Cronbach's alpha = 0.748, ranging from 0.359 to 0.868 for different domains). The construct validity was evaluated by CFA and five factors from ten items were confirmed and all goodness-of-fit-indices were in acceptable levels.Conclusion:The article concludes that the Persian version of BEIS-10 in five factors from ten items was a reliable and valid instrument for measuring EI in the general population. As well, the article was suggesting that the Persian version of BEIS-10 may stand as a suitable alternative to time-consuming tools for EI measurement since this scale appears to be time-saving and applicable to Iranian society.

EQ Training for Management Cascades Value in the Field: UCB Pharma Case in Italy

In times of rapid change, how can we support managers to meet professional challenges successfully? How can each manager become an effective change agent? How can we promote professional development at all levels and improve communication skills appropriate for the different audiences with whom they must interface? This study explores emotional intelligence (EQ) as a key to unlocking managerial performance in volatile, uncertain, complex, and ambiguous (VUCA) corporate environments. Through a graduated and structured process that started in 2017, UCB Pharma Spa, a multinational pharmaceutical company, decided to invest in a pilot to develop the social and emotional skills of organizational members, from senior managers to staff associates. An action learning and change management model was used to design and facilitate the program intervention. Individual EQ and artificial intelligence (AI)-driven team assessments were used to target development efforts, as well as gather pre- and post-program data. The result was significant improvement in the quality of teamwork and people engagement, demonstrated by an increase in relational efficiency in 98% of cases.

Value creation during fourth industrial revolution: Use of intellectual capital by most innovative companies of the world

This study investigates the impact that intellectual capital (IC) and value creation have on a firm's performance, in relation to the leading innovative firms in the world, at the start of the Fourth Industrial Revolution. An analysis is based on the top 100 innovative companies from different countries and sectors, as indexed by Forbes in 2016, for the period between 2011 and 2015, by using the pooled OLS regression model. The Fourth Industrial Revolution characterizes the fusion of technologies, and is blurring the boundaries between physical, digital, and biological spheres. The study reveals that capital employed efficiency and human capital efficiency have a significant positive impact on a firm's performance, whereas, the relational capital efficiency and structural capital efficiency are not related to it. Findings also suggest that relational capital efficiency is positively related to the value creation of innovative firms, while all the other mechanisms of intellectual capital and Modified Value-Added IC (MVAIC), are not associated with the value creation of innovative companies. The study advocates that innovation policies are critical, and require a rigorous review from the top management in order to meet the challenges of the Fourth Industrial Revolution, that is heavily innovation-based, and requires overwhelmingly new competencies.

Intellectual capital and its impact on business performance: An empirical study of Portuguese hospitality and tourism sector

Purpose: The propose of this study is to determine the influence of Intellectual Capital (IC) and its components’ impact on Portuguese tourism organizations’ business performance through Return on the assets (ROA). This work evaluate and compare the intellectual capital in its four dimensions: (i) capital employed; (ii) human capital; (iii) structural capital and (iv) relational capital. Design/methodology/approach: To approach the aim of the study the method Value Added Intellectual Coefficient (VAICTM) was applied and the practical data were collected from the Simplified Business Information (IES) through SABI (Iberian Balance Sheet Analysis System) database. The economic and financial information was collected from balance sheets and financial reports of 46.951 Portuguese companies in the hospitality and tourism sector during 2016. Multiple regression analysis was employed to identify the effect of IC components’ that significantly contribute to the company performance.Findings: The paper reveals that VAICTM, human capital efficiency coefficient (HCE), capital employed efficiency coefficient (CEE).and ROA are positively related among Portuguese’s hospitality and tourism sector. However, the structural capital efficiency coefficient (SCE) presents a negative association with profitability and the results of the relationship between the variable relational efficiency coefficient (RCE) and ROA do not present statistical significance.Practical implications: The application of the VAICTM model presented in this paper provides a basis for practical application for management.Originality/value: The paper represents a pioneering attempt to understand the relationship of intellectual capital and firm’s profitability on Portuguese hospitality and tourism sector’s, to provide solid recommendations for the importance of intellectual capital in the sustainable growth of organizations in this sector.