For many authors, the difference between the market value of companies' shares and their book value is the consequence of intellectual capital (IC). To test this, this paper suggests a methodology to study the relationship between IC indicators and the market‐to‐book ratio (MBR). In addition, it presents an exploratory application of that methodology in the field of human capital (HC) and within the Spanish banking industry. In this research, the relationships between HC, MBR and other business performance indicators are measured.
The methodology mentioned above creates a score for each of the three main IC components: human, structural and relational capital. These scores try to measure the relative position of companies in the same industry in each of the IC blocks. Then, a global score is set, combining the scores of the previous blocks. For these calculations to be done, a common set of indicators in the companies studied is needed. The lack of balance nowadays between showing strategy uniqueness and delivering comparable information across firms, when preparing external IC reports, has limited the empirical application of the proposed methodology to HC indicators.
Preliminary results show a clear positive relationship between HC indicators and MBR, and almost a non existent one between HC indicators and banks' efficiency and financial return. In any case, the highest correlations found are between, on the one hand, banks' efficiency and financial return and, on the other hand, MBR.
The value of this paper lies mainly in the methodology it provides for external IC benchmarking
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