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Does ownership structure affect firm value? Intellectual capital across industries perspective

Chiung‐Ju Liang (Graduate Institute of Finance, National Taiwan University of Science and Technology, Taipei, Taiwan)
Tzu‐Tsang Huang (Department of Finance, Hsing Wu College of Science and Technology, Taipei, Taiwan)
Wen‐Cheng Lin (Department of Business Administration, National Taipei College of Business, Taipei, Taiwan)

Journal of Intellectual Capital

ISSN: 1469-1930

Article publication date: 25 October 2011

Abstract

Purpose

Previous empirical studies on the nature of the relationship between ownership and corporate value have produced mixed results. Meanwhile, effective management of knowledge‐based intellectual capital has become a key factor to corporate success, both in firm performance and corporate value. Thus, this paper aims to reexamine the link among ownership, proxies for intellectual capital and corporate value in the emerging Taiwan market.

Design/methodology/approach

Using two‐stage least square estimation of panel data in a simultaneous equations framework, the authors focus on: What is the interdependent impact of ownership on corporate value through the mediating role of intellectual capital (IC)? Does ownership directly or indirectly (i.e. via IC) influence corporate value? Does it persist across industries?

Findings

The empirical results suggest that the relationship between ownership and corporate value mainly depends on industry characteristics and the nature of proxies for intellectual capital in the emerging Taiwanese market. Further, the impacts of ownership on corporate value in more traditional industries are even stronger, that is, there exists the direct impact of ownership mechanism on corporate value. Notably, for the high‐tech firms, ownership can indirectly affect corporate value through the moderating role of intellectual capital.

Research limitations/implications

The implication reminds managers and investors not merely focusing on ownership mechanisms as the main value‐creation information, but a thorough review of IC should be made in order to avoid making incorrect decisions. The limitations suggest areas for further research. For instance, it is important to extend the role of intellectual capital (i.e. to employ other variables to proxy for IC) in exploring the interdependent impact of ownership on corporate value.

Originality/value

The paper potentially adds to ongoing research by extending the importance of the concept of IC in assessing the interdependent impact of ownership on corporate value.

Keywords

Citation

Liang, C., Huang, T. and Lin, W. (2011), "Does ownership structure affect firm value? Intellectual capital across industries perspective", Journal of Intellectual Capital, Vol. 12 No. 4, pp. 552-570. https://doi.org/10.1108/14691931111181724

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited