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1 – 10 of over 1000Ahmed Mohamed Habib and Nahia Mourad
This study develops a robust model to measure intellectual capital efficiency (ICE). It also analyzes ICE across Gulf companies, sectors and countries.
Abstract
Purpose
This study develops a robust model to measure intellectual capital efficiency (ICE). It also analyzes ICE across Gulf companies, sectors and countries.
Design/methodology/approach
This study uses data envelopment analysis (DEA), the Malmquist productivity index (MPI), difference tests and additional analyses on a dataset consisting of 276 firm-year observations.
Findings
The findings indicate that the study model is robust to additional analysis. The results show significant differences in ICE between firms during the study period and noteworthy differences between countries, where the Qatari and Bahraini firms achieved the best ICE compared to other countries.
Practical implications
The results of this study have significant ramifications for increasing knowledge of ICE analysis models among relevant parties. In addition, the findings may affect trading strategies because investors and financiers are motivated by the potential for lucrative financial returns on their investments in companies that prioritize ICE strategies.
Originality/value
This research contributes to the literature by proposing a robust model for estimating the ICE. It also compares ICE across Gulf companies, industries and countries to shed light on their ICE challenges.
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The purpose of this paper is to examine potential financial accounting treatments for cryptocurrencies, including the current guidance, and compare the benefits and shortcomings…
Abstract
Purpose
The purpose of this paper is to examine potential financial accounting treatments for cryptocurrencies, including the current guidance, and compare the benefits and shortcomings of each method. It proposes the introduction and use of an intangible asset revaluation model. The study aims to inform both standard setters and financial statement preparers of the most appropriate accounting treatment of this digital asset.
Design/methodology/approach
This paper uses an exploratory analysis and conceptualizes each technical treatment option. For each potential treatment, this paper describes the technical accounting guidance and financial statement implications. The study also uses an illustration to compare the outcomes of each treatment option.
Findings
This paper provides insights into the most appropriate financial accounting treatment of cryptocurrencies. Findings indicate the best option is an intangible asset revaluation model that allows firms to elect a fair value option and record fluctuations in market value to other comprehensive income. This model would improve the accuracy of asset numbers while maintaining the relevance of income amounts by preventing large gains or losses from fair value fluctuations from flowing through the income statement.
Research limitations/implications
The number of firms that hold cryptocurrencies on their balance sheet remains small, thus the research is limited to anecdotal and expository analysis.
Practical implications
The study includes implications for accounting standard setters as they continue to deliberate the appropriate financial accounting treatment for cryptocurrencies. The study can inform the standard setting process and impact future authoritative guidance.
Social implications
The use of cryptocurrency is extremely popular among individual investors and consumers. Updating accounting guidance on crypto can help support a robust crypto market through a useful, informative approach to measurement and reporting. This can also aid in improving the economic prosperity of crypto investors.
Originality/value
This paper fulfills an identified need to examine and understand appropriate accounting guidance for cryptocurrencies. Current guidance has been deemed ineffective and there is debate regarding the proper treatment moving forward. This paper contextualizes this debate and provides suggested solutions.
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Fernando Ruiz-Lamas and David Peón
This article analyses the recent inverse transition from goodwill impairment to goodwill amortisation implemented in Spain in 2016. The authors contribute to the existing…
Abstract
Purpose
This article analyses the recent inverse transition from goodwill impairment to goodwill amortisation implemented in Spain in 2016. The authors contribute to the existing literature by describing their differing impact over goodwill and impairment figures and testing the impact of goodwill on balances over stock prices.
Design/methodology/approach
First, using a database with all Spanish non-financial firms with positive goodwill on their balance sheets, the authors describe the impact of the regulatory change over goodwill and impairment figures. Second, focussing on listed firms only, the authors study the impact of financial reporting of goodwill and impairment on stock prices.
Findings
Average goodwill per company and the share of goodwill over total assets significantly reduced after 2016, but the results cannot be easily extrapolated to listed firms due to lack of data. When testing the impact of potentially inflated goodwill balances on prices, the authors find that investors kept overvaluing firms with inflated goodwill balances also with the amortisation method.
Research limitations/implications
The lack of data for listed firms with goodwill in Spain makes it difficult to obtain statistically sound evidence, the results could be biased by the cultural traits of the country and related to the intensity of enforcement and monitoring.
Practical implications
This might suggest that the effects of the impairment method linger, so the authors conform to the interpretation that the systematic amortisation paired with a periodic impairment test may lead to accounting that better reflects the underlying economics of goodwill.
Originality/value
To the best of the authors' knowledge, there are no recent articles that analyse this new “turn-around” requiring again the systematic amortisation of goodwill.
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Wen-Hong Chiu, Zong-Jie Dai and Hui-Ru Chi
This study aims to explore how manufacturing firms master customer lock-in through value creation by servitization innovation strategies from the perspective of asset specificity.
Abstract
Purpose
This study aims to explore how manufacturing firms master customer lock-in through value creation by servitization innovation strategies from the perspective of asset specificity.
Design/methodology/approach
A multiple case study with triangulation fashion is adopted to identify servitization innovation strategies. Several manufacturing firms were investigated, which are distributed in different positions of the value chain. Content analysis and abductive approaches are adopted to analyze the data. Moreover, an in-depth interview and participatory observation were conducted to refine the analysis results.
Findings
This study identified four different focusing points of servitization operations. Based on these, the paper further induces an innovative servitization strategy matrix of customer lock-in, concerning communion, intellectual, existential and insubstantial strategies. Furthermore, a conceptual model of customer lock-in by servitization innovation from the perspective of asset specificity is elaborated. It is suggested that companies can use tangible or intangible resources by sharing or storing operations to create servitization value.
Originality/value
This study theoretically proposes a conceptual model to extend servitization innovation as an intangible asset and adopt the new perspective of asset specificity to illustrate the value creation in servitization to generate customer lock-in.
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Intangible capital (IC) is an important factor for economic growth and firm performance. The role IC has played has become even more crucial in recent decades, possibly…
Abstract
Purpose
Intangible capital (IC) is an important factor for economic growth and firm performance. The role IC has played has become even more crucial in recent decades, possibly influencing debt capacity and default risk assessment. This paper studies how entrepreneurial and employee-based IC affects financial leverage.
Design/methodology/approach
Employer–employee unbalanced panel data provided by Statistics Finland that refer to Finnish small and medium-sized enterprises (SMEs) are used. Intangibles are measured with an expenditure-based method. Employee-based IC and entrepreneurial knowledge are used to explain debt financing in SMEs.
Findings
The findings imply that IC-intensive firms have less debt capacity due to weak pledgeability and asymmetric information between borrower and lender. Entrepreneurs with managerial or financial knowledge increase the firm's debt capacity compared to other entrepreneurs, especially in knowledge-intensive services (KIS). One explanation is that the entrepreneurs are more competent in negotiating with lenders as the entrepreneurs possess better financial skills. Entrepreneurs with technical knowledge decrease the firm's debt capacity in all industries.
Originality/value
While some earlier research focused on the IC–financial leverage relationship, hardly any study has looked at entrepreneurial IC. This paper provides new insights by including entrepreneurial IC alongside employee-based IC.
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Jasmina Ognjanovic, Vladimir Dzenopoljac and Stefano Cavagnetto
The study aims to assess the relative impact of intellectual capital (IC) as opposed to tangible assets on profitability and employee performance in hotels in Serbia before and…
Abstract
Purpose
The study aims to assess the relative impact of intellectual capital (IC) as opposed to tangible assets on profitability and employee performance in hotels in Serbia before and during the coronavirus disease 2019 (COVID-19) pandemic.
Design/methodology/approach
The current study was undertaken in 2019, the year before COVID-19, and 2020, the year of COVID-19's major impact. This study utilizes the Value-Added Intellectual Coefficient (VAIC) as a measure of efficient use of IC. Financial data were collected from 163 hotels in Serbia. Structural equation modeling (SEM) was used to test the proposed hypotheses.
Findings
The results revealed that IC was a relevant factor for both profitability and employee performance before and during the COVID-19. However, the study reveals a negative moderating effect of tangible capital efficiency (TCE), meaning that with the increase of TCE, the relationship between IC and performance becomes weaker.
Research limitations/implications
The main limitation of the study is rooted in VAIC's ability to fully incorporate all elements of IC, leaving the relational capital out.
Practical implications
To achieve better performance, hotel management should direct resources more towards IC and less toward tangible assets, which implies doing more with less.
Originality/value
The results indicate the importance of IC in a period of crisis for the industry and economy that are not recognized as knowledge intensive. To the best of the authors' knowledge, no other study has attempted to assess the relative contribution of tangible assets and IC before and during the COVID-19 pandemic.
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Ahmed Bounfour, Thomas Housel, Trent Silkey and Alberto Nonnis
The purpose of the current study is to illustrate the importance of strategic agility (SA), the capacity to respond agilely to a rapidly changing environment, for digitally…
Abstract
Purpose
The purpose of the current study is to illustrate the importance of strategic agility (SA), the capacity to respond agilely to a rapidly changing environment, for digitally transforming firms during the COVID-19 crisis. A secondary purpose of the study is to conceptually frame SA as a function of the creative to realized intangible capital (IC) ratio.
Design/methodology/approach
To inferentially corroborate the hypothesis, this study exploits the results of a recent firm-level survey, conducted under the H2020 project GlobalInto (2021). Via OLS and ordered logistic regressions, the relationship among SA, economic performance and IC was tested.
Findings
The exploratory findings implied that the more strategically agile companies were those that responded more effectively to the pandemic crisis, but only if they were ahead in terms of digital transformation. Moreover, the results implied that firms that were able to efficiently convert their creative IC into realized IC were the most strategically agile.
Originality/value
This study developed a new conceptual framework for digitally transforming firms that included the role of SA and the IC conversion ratio in the context of extreme threats to the survival of firms. Some preliminary practical recommendations were offered to management about how to measure the IC conversion ratio as well as how to stimulate and reward greater creativity among employees, filling a notable gap in the SA literature that provides less than precise guidance about how this concept can be measured.
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Md. Jahidur Rahman and Hongyi Liu
This study aims to examine the impact of intellectual capital (IC) and its three components (human, structural and relational capital) on corporation performance in the Chinese…
Abstract
Purpose
This study aims to examine the impact of intellectual capital (IC) and its three components (human, structural and relational capital) on corporation performance in the Chinese transportation industry. In addition, this study also investigates auditor characteristics (both Big-N and non-Big-N auditors) as a moderating role to examine the relationship between IC and corporate performance.
Design/methodology/approach
The data include 398 firm-year observations of transportation companies listed on the Shanghai and Shenzhen Stock Exchange from 2011 to 2020. Value-added intellectual coefficient (VAIC) model and its modified version (MVAIC) are applied to measure IC efficiency. Finally, the fixed effects regression analysis is used to mitigate the endogeneity issue. To investigate the moderating effect of auditor characteristics, the authors divide the samples based on the clients audited by Big-4 and non-Big-4 firms.
Findings
This study reveals that IC can enhance firm performance in China’s transportation sector. Overall, findings indicate that on the whole, IC has a positive and significant impact on corporation profitability and productivity. Human capital and physical and financial assets (capital employed) play highly important roles, but structural capital has no significant impact. The authors also found that auditor characteristics play an important moderating role in the connection between IC and corporate performance. For example, the positive association between IC and corporate performance is more pronounced when Big-4 auditors audit client firms. At the same time, the authors found a negative relationship between IC and firm performance when non-Big-4 auditors audit client firms.
Practical implications
Managers must understand that several components of IC have a total effect on corporate financial performance. Therefore, managers can dedicate more resources to such components based on the performance outcomes to emphasize their business strategies.
Originality/value
This study is the first empirical analysis of the impact of IC and its components on corporation performance in the transportation sector in China, an emerging market. Previous studies mainly focus on developed countries’ high technology and financial industries sectors but the impact of IC in transportation industry largely remains unknown. Thus, the present findings contribute to IC literature by revealing several underlying mechanisms by which the components of IC help achieve good firm performance.
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Wanyi Chen and Fanli Meng
Corporate digital transformation (CDT) has challenged traditional tax administration systems. This study examines the impact of CDT on tax avoidance behavior and tests whether tax…
Abstract
Purpose
Corporate digital transformation (CDT) has challenged traditional tax administration systems. This study examines the impact of CDT on tax avoidance behavior and tests whether tax authorities can identify this behavior.
Design/methodology/approach
Using data on listed companies on the Shanghai and Shenzhen Stock Exchanges from 2008 to 2020, this study applies the Heckman two-stage and cross-section models.
Findings
The results show that the higher the degree of CDT, the more aggressive the tax avoidance behavior. The CDT's impact on corporate tax avoidance is more significant under strong government tax efforts.
Originality/value
This study expands research on the economic consequences of CDT and the factors influencing corporate tax avoidance behavior. Moreover, it has important implications for governments to monitor tax avoidance behavior under the CDT, improve digital tax systems, and pay more attention to the tax administration of digital assets.
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