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Article
Publication date: 23 July 2020

Mahmoud Lari Dashtbayaz, Mahdi Salehi, Alieyh Mirzaei and Hamideh Nazaridavaji

The purpose of this study is to evaluate the impact of corporate governance on intellectual capital (IC) in companies listed on the Tehran stock exchange.

Abstract

Purpose

The purpose of this study is to evaluate the impact of corporate governance on intellectual capital (IC) in companies listed on the Tehran stock exchange.

Design/methodology/approach

In this paper, the board features (size, independence and CEO duality) and the characteristics of the audit committee (financial expertise, independence and size) are considered to measure the factors of corporate governance. The IC is also divided into communicative, human, structural and value-added IC. Research data are gathered using a sample of 132 companies during 2013-2016. Research hypotheses are analyzed using panel data and logistic regression models.

Findings

The findings indicate that while the board’s independence, financial expertise and the size of the audit committee are negatively related to the communicative capital, the relationship between audit committee independence and communicative capital is positive and significant. Further, the authors observe that there is a positive relationship between board independence and human capital, a negative and significant link between audit committee size and human capital. By the way, the results reveal that audit committee independence and audit committee size have, respectively positive and negative impact on structural capital.

Originality/value

The results of the current study may give more insight into the relationship between corporate governance and managerial capital in developing nations.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 13 no. 4
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 8 February 2023

Redhwan Al-Dhamari, Hamid Al-Wesabi, Omar Al Farooque, Mosab I. Tabash and Ghaleb A. El Refae

The purpose of this study is to empirically examine how the voluntary formation of a specialised investment committee (IC) and IC characteristics affect financial distress risk…

Abstract

Purpose

The purpose of this study is to empirically examine how the voluntary formation of a specialised investment committee (IC) and IC characteristics affect financial distress risk (FDR) and whether such impact is influenced by the level of investment inefficiency.

Design/methodology/approach

The authors use a large sample of Gulf Cooperation Council (GCC) non-financial companies during 2006–2016. A principal component analysis is done to aggregate and derive a factor score for IC characteristics (i.e. independence, size and meeting) as a proxy for the effectiveness of IC. This study also uses three measurements of FDR to corroborate the findings and partitions sample firms into overinvesting and underinvesting companies to examine the potential impact of investment inefficiency on the IC–FDR nexus.

Findings

Using feasible generalised least square estimation method, the authors document that the likelihood of financial distress occurrence decreases for firms with separate ICs. The authors also find that firms with effective ICs enjoy lower FDR. In other words, the probability of financial distress minimises if the IC is large, meets frequently and has a high number of independent directors. However, the authors find neither any moderation nor any mediation effect of investment inefficiency for the impact of IC and IC attributes on FDR. The additional analysis indicates the expected benefits of an actively performing IC are amplified for firms with risk of both over- and underinvestment. These findings are robust to alternative measures of FDR and investment inefficiency, sub-sample analysis and endogeneity concerns.

Originality/value

This study, to the best of researchers’ knowledge, is the first to provide evidence in GCC firms’ perspective, suggesting that the existence of an effective IC is associated with a lower risk of financial distress, and to some extent, the economic benefits of IC are aggrandised for companies with a high probability of over- and underinvestment problems. These results are unique and contribute to a small but growing body of literature documenting the need for effective ICs and their economic consequences on investment efficiency in the FDR environment. The findings of this study carry valuable practical implications for regulatory bodies, policymakers, investors and other interested parties in the GCC region.

Details

International Journal of Accounting & Information Management, vol. 31 no. 2
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 9 July 2019

Gianluca Ginesti

This study aims to explore the relationship between top management characteristics and intellectual capital (IC) performance of small companies.

Abstract

Purpose

This study aims to explore the relationship between top management characteristics and intellectual capital (IC) performance of small companies.

Design/methodology/approach

This research offers an empirical investigation into a unique sample of 135 small Italian companies, which have been recognised as meeting legal values. This study uses a regression analysis to test whether CEO age, CEO connections and management team size affect IC performance.

Findings

Companies managed by CEOs with higher levels of connections and with a greater number of managers exhibit improved IC performance. In addition, this study provides evidence that companies with older CEOs demonstrate better IC efficiency.

Research limitations/implications

This study does not consider all top management-specific factors and incentives that may affect IC performance and uses a limited sample of companies.

Practical implications

This study suggests that increased network activity and larger management teams are beneficial for small companies to improve the efficiency of IC used.

Originality/value

The work offers novel empirical evidence to understand what governance and management-specific factors affect the efficiency in managing IC assets in small companies.

Details

Corporate Governance: The International Journal of Business in Society, vol. 19 no. 6
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 28 March 2023

Muhammad Farooq and Naeem Ahmad

This study aims to examine the moderating effect of intellectual capital (IC) in the relationship between board characteristics and firm performance of non-financial firms listed…

Abstract

Purpose

This study aims to examine the moderating effect of intellectual capital (IC) in the relationship between board characteristics and firm performance of non-financial firms listed on the Pakistan Stock Exchange (PSX) from 2010 to 2019.

Design/methodology/approach

The modified value-added intellectual capital (MVAIC) was used to assess the efficiency of sample firms’ IC, which is a modified version of Pulic’s (2000) model VAIC that includes an additional component, rational capital efficiency. Board size, independence, board meetings, chief executive officier duality and board gender diversity are all measures of board characteristics. Firm performance is measured through return on assets, return on equity and earnings per share. The Hausman test was used to select the best model for the study.

Findings

Based on the regression results, the board’s gender diversity and duality have a significant inverse relationship with profitability. In terms of the impact of board characteristics on IC, it is discovered that board independence and diversity are significantly inversely related to IC. Furthermore, IC is significantly related to profitability by all means. In terms of the moderating effect of IC, the findings show that IC significantly moderates the negative relationship between duality and profitability, as well as board gender diversity and profitability.

Practical implications

This study made some policy recommendations to policymakers. Duality should be avoided in PSX firms because it is significantly inversely related to profitability and IC. Second, female board participation should be subjective. Third, because the findings indicate that Pakistani firms lack true board independence, the Securities and Exchange Commission of Pakistan should take additional steps to ensure that the board is truly independent.

Originality/value

To the best of the authors’ knowledge, this is the first study of its kind to study the moderating effect of IC between corporate governance and firm performance.

Details

Corporate Governance: The International Journal of Business in Society, vol. 23 no. 6
Type: Research Article
ISSN: 1472-0701

Keywords

Open Access
Article
Publication date: 24 December 2021

Nicholas Asare, Francis Aboagye-Otchere and Joseph Mensah Onumah

This study examines the nature of the relationship between board structures (BSs) and intellectual capital (IC) of banks in Africa.

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Abstract

Purpose

This study examines the nature of the relationship between board structures (BSs) and intellectual capital (IC) of banks in Africa.

Design/methodology/approach

Using annual data from financial statements of 366 banks from 26 African countries from 2007 to 2015, the study estimates IC using the value-added intellectual coefficient (VAIC) and BSs using board size, board independence and board gender diversity. The system generalized method of moments and panel-corrected standard error estimation strategies are used to estimate panel regressions.

Findings

There is a significant negative relationship between board independence and intellectual capital. The results also indicate that the IC of banks does not depend on board size and board gender diversity.

Practical implications

The study's findings provide evidence of the extent to which BSs have been instituted to support investments in intellectual capital as a means of improving the performance of banks in Africa.

Originality/value

This study provides some empirical evidence from Africa's banking sector to justify that banks with better IC have boards that are less independent. This study is one of the few studies that employs many countries' data.

Details

Asian Journal of Economics and Banking, vol. 7 no. 1
Type: Research Article
ISSN: 2615-9821

Keywords

Article
Publication date: 5 May 2015

Ranjith Appuhami and Mohammed Bhuyan

– The purpose of this paper is to examine the influence of corporate governance on intellectual capital (IC) in top service firms in Australia.

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Abstract

Purpose

The purpose of this paper is to examine the influence of corporate governance on intellectual capital (IC) in top service firms in Australia.

Design/methodology/approach

Drawing on the agency theory, the paper develops hypotheses about relationships between corporate governance mechanisms (chief executive officer [CEO] duality, board size, board composition and subcommittee composition) and IC. The study uses a multiple regression analysis on data collected from corporate annual reports of 300 firm-year observations.

Findings

The findings of the regression analysis indicate that CEO duality, board composition and remuneration committee composition are significantly associated with IC. In contrast, there is no evidence that board size and audit committee composition have an effect on IC. The study contributes to agency theory in general and the literature on IC and corporate governance more specifically.

Practical implications

The findings of the study might be of interest to regulators, investment analysts, shareholders, company directors and managers in Australia, as well as academics, in designing corporate governance mechanisms to develop IC.

Originality/value

Corporate governance is country-specific and, hence, its impact on managerial decisions leading to IC is different from country to country. This study provides empirical evidence on the relationship between corporate governance and IC in top service firms in Australia.

Details

Managerial Auditing Journal, vol. 30 no. 4/5
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 13 June 2023

Ejaz Aslam, Aziz Ur Rehman and Anam Iqbal

The purpose of this study is to investigate the mediating role of intellectual capital (IC) on the association between corporate governance mechanism (CGM) and the financial…

Abstract

Purpose

The purpose of this study is to investigate the mediating role of intellectual capital (IC) on the association between corporate governance mechanism (CGM) and the financial efficiency of Islamic banks (Z-score, net investment income and loan to deposit) and verify it through standard mediation in the panel based on interaction.

Design/methodology/approach

The data of this study draws from 125 full-fledged Islamic banks and windows from 26 Organization of Islamic Cooperation (OIC) over the period of 2009 to 2019. A two-step system generalize method of moment estimation is used to test the hypotheses.

Findings

The results underwrite that the inclusion of IC as a mediating variable has influenced positively the corporate governance and financial efficiency of IBs. Besides, only CEO power and Shariah supervisory board positively affect the financial efficiency of IBs. While structural capital and relational capital positively affect the financial efficiency of IBs. Apart from that, results show that the CGM has a significant relationship with the IC value of IBs.

Research limitations/implications

These findings are valuable for policymakers and regulators to set policies to improve CG structure and effective use of IC resources to improve banking efficiency. Additionally, findings might be helpful for the bankers to proficiently use the IC as a premise to plan new strategies to get an upper hand in financial performance.

Originality/value

This study extends and contributes to the current literature by analysing the role of IC along with CG to boost the financial efficiency of banks in OIC countries.

Details

Corporate Governance: The International Journal of Business in Society, vol. 24 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 22 March 2019

Yolanda Ramirez, Elena Merino and Montserrat Manzaneque

The purpose of this paper is threefold: first, to know the views of university stakeholders concerning intellectual capital (IC) reporting; second, to examine the quality of…

Abstract

Purpose

The purpose of this paper is threefold: first, to know the views of university stakeholders concerning intellectual capital (IC) reporting; second, to examine the quality of voluntary IC disclosure by public Spanish universities on their websites; and third, to analyze some of the potential factors affecting this kind of disclosure.

Design/methodology/approach

The paper applies a content analysis and a survey. The content analysis was used to analyze the websites of 50 public Spanish universities in the year 2016, while the survey was submitted to all members of the Social Councils of Spanish public universities. Also, a regression analysis (ordinary least square model) is conducted to relate the disclosure index to its determinants.

Findings

The results of this study show that human capital was the most disclosed category with relational capital being the least frequently disclosed. However, the quality of structural capital disclosures was higher than relational and human capital. Moreover, the results show that size and university’s internationality affect IC disclosure in Spanish public universities.

Practical implications

This paper stimulates the debate between universities and policy-makers concerning the benefits related to IC reporting as a tool for addressing different stakeholders’ needs. In order to satisfy the information needs of university stakeholders, Spanish universities can be recommended to focus on reporting higher quality information on financial relations, students’ satisfaction, quality standard, work-related knowledge/know-how and collaboration between universities and other organizations such as firms, local government and society as a whole.

Originality/value

This research brings new expertise regarding IC disclosure in higher education and to reveal some of the possible determinants to improve this disclosure.

Details

Online Information Review, vol. 43 no. 5
Type: Research Article
ISSN: 1468-4527

Keywords

Article
Publication date: 12 October 2015

Viktoria Goebel

The purpose of this paper is to investigate the relationships of company characteristics to intellectual capital (IC) reporting in a mandatory management report. Based on the…

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Abstract

Purpose

The purpose of this paper is to investigate the relationships of company characteristics to intellectual capital (IC) reporting in a mandatory management report. Based on the relevant regulation in Germany, IC components of the mandatory management report can be characterised as being partially required, partially recommended and partially voluntary.

Design/methodology/approach

A content analysis of 428 group management reports of listed German companies was conducted for required, recommended and voluntary IC reporting. To investigate the relationship of certain company characteristics to IC reporting, this study conducted a regression analysis considering company returns, size and industry.

Findings

The findings show that structural capital dominates total IC reporting in Germany. This observation is in contrast to prior literature, in which relational capital has been found to be most frequently reported. However within the sub-group of voluntary IC reporting in German companies, relational capital has the highest proportion. The regression results show that company returns show no effect on IC reporting, but size and industry group are significantly related to IC reporting.

Research limitations/implications

The findings indicate that IC reporting requirements and the relatively stringent German regulatory recommendations influence corporate IC reporting behaviour. The findings provide a basis for further discussion by standard setters regarding the extent to which requirements and recommendations on individual IC components seem to encourage IC reporting.

Originality/value

This study utilises the unique research setting in Germany with a mandated management report to distinguish between required, recommended and voluntary IC reporting.

Details

Journal of Intellectual Capital, vol. 16 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 12 January 2015

Viktoria Goebel

The purpose of this paper is to identify a measure of intellectual capital (IC) value which offers new research opportunities for empirical investigations and to examine the…

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Abstract

Purpose

The purpose of this paper is to identify a measure of intellectual capital (IC) value which offers new research opportunities for empirical investigations and to examine the determinants of IC value.

Design/methodology/approach

In total, 4,488 firm years of German companies are investigated to compare three measures of IC value: market-to-book, Tobin’s q, and long-run value-to-book (LRVTB).

Findings

LRVTB is observed to be the IC value measure with the highest explanatory value. This measure provides an approach to empirically test previously untested hypotheses on IC value. The results on testing determinants of IC value indicate that IC value is positively related to leverage and motivational payments to employees and negatively associated with company size. In contrast, recognised intangible assets, research and development (R & D), company age and concentrated ownership show no significant effects.

Research limitations/implications

The findings on IC value measures contribute to IC research as they offer a way to estimate IC value for testing IC-related hypotheses. The findings on IC determinants have implications for IC management as the relevant determinants can be considered for IC value creation.

Originality/value

This paper responds to the challenge posed by previous IC research to develop more creative quantitative approaches to estimate IC value (Marr et al., 2003; Mouritsen, 2006) in order to test IC-related hypotheses by innovatively applying a measure from mergers and acquisitions research to IC.

Details

Journal of Intellectual Capital, vol. 16 no. 1
Type: Research Article
ISSN: 1469-1930

Keywords

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