Search results

1 – 10 of over 12000
To view the access options for this content please click here
Article
Publication date: 31 December 2019

Harishankar Vidyarthi and Ranjit Tiwari

The purpose of this paper is to estimate the economic (namely cost, revenue and profit) efficiency and its association with intellectual capital of 37 BSE-listed Indian…

Abstract

Purpose

The purpose of this paper is to estimate the economic (namely cost, revenue and profit) efficiency and its association with intellectual capital of 37 BSE-listed Indian banks over the period 2005–2018.

Design/methodology/approach

This study employs truncated Tobit regression to compute the relationship between intellectual capital and estimated cost, revenue and profit efficiency using Data Envelopment Analysis (DEA) for the 37 BSE-listed Indian banks within the panel data framework.

Findings

Estimates suggest that banks’ overall annual average cost, revenue and profit efficiency are 0.4466–0.7519, 0.4825–0.8773 and 0.4905–0.8803, respectively, during the sample period. Further, Tobit regression results indicate that the aggregate intellectual capital (value-added intellectual coefficient or Modified Value-added Intellectual Capital) has a positive but minimal impact on these efficiency parameters at 1 percent significance level for the overall sample as well as public sector banks. Among all the sub-components of intellectual capital, human capital, structural capital and relational capital have a positive and moderate impact on these efficiency measures for the overall sample. Control variables, particularly bank size, are significant drivers of the estimated efficiency of banks.

Research limitations/implications

Findings suggest that banks should invest adequately to enhance their overall intellectual capital to further augment these economic efficiency measures in the long run.

Originality/value

This study computes cost, revenue and profit efficiency of 37 BSE-listed banks based on DEA followed by intellectual capital using the Pulic approach (1998 and 2000) and the Bontis (1998) approach in the first stage. Later, it examines the dynamics between the computed efficiency parameters and intellectual capital using Tobit regression within the panel data framework.

Details

Journal of Intellectual Capital, vol. 21 no. 1
Type: Research Article
ISSN: 1469-1930

Keywords

To view the access options for this content please click here
Article
Publication date: 20 May 2020

King Carl Tornam Duho

This paper investigates the impact of intellectual capital and its components on slack-based technical efficiency (SBM-TE) of banks.

Abstract

Purpose

This paper investigates the impact of intellectual capital and its components on slack-based technical efficiency (SBM-TE) of banks.

Design/methodology/approach

Data envelopment analysis is used to compute SBM-TE scores and the Value-Added Intellectual Coefficient (VAIC™) model is used to measure intellectual capital. An unbalanced panel of 32 banks that operated from 2000 to 2017 has been used.

Findings

Overall, the efficiency scores are averaged at 79%, suggesting that an inefficient bank needs to enhance technical efficiency by 21% to be at par with the best performing banks. Beta-convergence and sigma-convergence exist among banks with faster speed evident among listed and local banks. Intellectual capital has a positive impact on SBM-TE and human capital is the main driver of technical efficiency among banks. This result is specifically evident among non-listed banks and foreign banks. Economies of scale property are also evident among the banks. Competition and asset tangibility inhibit technical efficiency among banks.

Practical implications

Banks are advised to invest in value-adding emerging technologies and their employees so as to enhance their efficiency. The study offers insights for policymakers, practitioners and researchers in emerging markets.

Originality/value

The study is premier in employing the SBM-TE to explain the intellectual capital and efficiency nexus, as well as, testing for both beta-convergence and sigma-convergence.

Details

Journal of Economic Studies, vol. 47 no. 7
Type: Research Article
ISSN: 0144-3585

Keywords

To view the access options for this content please click here
Article
Publication date: 25 July 2008

Magdi El‐Bannany

The purpose of this paper is to investigate the determinants of intellectual capital performance in the UK banks over the period 1999‐2005.

Abstract

Purpose

The purpose of this paper is to investigate the determinants of intellectual capital performance in the UK banks over the period 1999‐2005.

Design/methodology/approach

Multiple regression analysis is used to test the relationship between the intellectual capital performance as a dependent variable and certain independent variables.

Findings

Results indicate that the standard variables, bank profitability and bank risk, are important. The results also show that investment in information technology (IT) systems, bank efficiency, barriers to entry and efficiency of investment in intellectual capital variables, which have not been considered in previous studies, have a significant impact on intellectual capital performance.

Research limitations/implications

More evidence is needed on the determinants of intellectual capital performance before any generalisation of the results can be made. In addition, the empirical tests were conducted only on the Major British Banks Group over the period 1999‐2005 and hence the results of the study cannot be assumed to extend beyond this group of banks or to different study periods.

Practical implications

The study might help the banking regulators in addressing the factors affecting intellectual capital performance to take actions towards developing their performance and in turn maximise their value creation.

Originality/value

This paper adds to the literature on the determinants of intellectual capital performance in banks. In particular, it tests the theories that investment in IT systems, bank efficiency, barriers to entry and efficiency of investment in intellectual capital have impact on intellectual capital performance.

Details

Journal of Intellectual Capital, vol. 9 no. 3
Type: Research Article
ISSN: 1469-1930

Keywords

To view the access options for this content please click here
Article
Publication date: 21 June 2020

Noorlailie Soewarno and Bambang Tjahjadi

This study aims to investigate the intellectual capital–financial performance relationship using two models, namely the conventional Value-Added Intellectual Coefficient…

Abstract

Purpose

This study aims to investigate the intellectual capital–financial performance relationship using two models, namely the conventional Value-Added Intellectual Coefficient (VAIC) model and the adjusted Value-Added Intellectual Coefficient (A-VAIC) model.

Design/methodology/approach

This study is designed as a quantitative research focusing on the relationship between intellectual capital and financial performance of the banking industry in Indonesia. As many as 114 data are derived from the publicly listed banks on the Indonesia Stock Exchange for the period of 2012–2017. The multiple regression analysis is employed to test the hypotheses studied.

Findings

In general, the result confirms that intellectual capital affects financial performance. Although not all hypotheses of the study are supported by either the VAIC model or the A-VAIC model, the results provide a deeper and new insight on how each component of intellectual capital efficiency (human capital, structural capital, capital employed, innovation capital) relates to financial performance (return on asset, return on equity, asset turnover, price to book ratio). The results also justify that further improvements in measuring intellectual capital are still needed in the future.

Research limitations/implications

This study limits its generalization since the sample is only in the Indonesian banking industry. Notwithstanding the limitation, the results imply that the Indonesian banking managers need to be aware of intellectual capital management because of its strategic role in enhancing financial performance.

Practical implications

This study contributes to the intellectual capital literature by providing empirical evidence on the use of both models, namely the conventional VAIC and the A-VAIC in the Indonesian banking industry research setting which is never been studied before.

Social implications

This study has the social implication to the enhancement of the quality life of the society. The higher the quality of intellectual capital in the banking firms, the better the banks serve the needs of the community.

Originality/value

This study contributes to the IC literature by providing empirical research on the use of the VAIC model and the A-VAIC model in the Indonesian banking industry.

Details

Journal of Intellectual Capital, vol. 21 no. 6
Type: Research Article
ISSN: 1469-1930

Keywords

To view the access options for this content please click here
Article
Publication date: 25 October 2011

Pirjo Ståhle, Sten Ståhle and Samuli Aho

The purpose of this study is to analyse the validity of the value added intellectual coefficient (VAIC) method as an indicator of intellectual capital.

Abstract

Purpose

The purpose of this study is to analyse the validity of the value added intellectual coefficient (VAIC) method as an indicator of intellectual capital.

Design/methodology/approach

The paper describes VAIC through its calculation formulae and aims to establish what exactly it is that the method measures. It also looks in detail at how intellectual capital is understood in the method, and discusses its conceptual confusions. Furthermore, the paper tests the hypothesis according to which VAIC correlates with a company's stock market value, and reflects the contradictory results of earlier studies.

Findings

The analyses show, first, that VAIC indicates the efficiency of the company's labour and capital investments, and has nothing to do with intellectual capital. Furthermore, the calculation method uses overlapping variables and has other serious validity problems. Second, the results do not lend support to the hypothesis that VAIC correlates with a company's stock market value. The main reasons behind the lack of consistency in earlier VAIC results lie in the confusion of capitalized and cash flow entities in the calculation of structural capital and in the misuse of intellectual capital concepts.

Practical implications

The analyses show that VAIC is an invalid measure of intellectual capital.

Originality/value

The result is important since the method has been widely used in micro and macro level analyses, but this is the first time it has been put to rigorous scientific analysis.

To view the access options for this content please click here
Article
Publication date: 21 June 2020

Tamanna Dalwai and Syeeda Shafiya Mohammadi

The purpose of this study is to empirically investigate the relationship between intellectual capital and corporate governance of Oman's financial sector companies…

Abstract

Purpose

The purpose of this study is to empirically investigate the relationship between intellectual capital and corporate governance of Oman's financial sector companies. Intellectual capital has been found to successfully contribute to the economic wealth creation of firms in germane literature. Unfortunately, financial statements do not necessarily capture and reflect the contributions of intellectual capital, thereby leading to an information asymmetry between companies and users of financial statements. The research also investigates the relationship between corporate governance and intellectual capital efficiency across various financial subsectors.

Design/methodology/approach

Data are collected from annual reports available on Muscat Securities Market for 31 listed financial sector companies for the period 2012 to 2016 and analyzed using a multiple regression model. Intellectual capital is measured using Pulic's efficiency measure of value-added intellectual coefficient (VAIC). Corporate governance individual components such as board characteristics, audit committee characteristics and ownership structure are presented as independent variables.

Findings

The findings suggest that board size and frequency of audit committee meetings have a significant association with the intellectual capital efficiency of Oman's financial sector. VAIC and human capital efficiency of banks are also significantly influenced by most of the corporate governance mechanisms; however, other subsectors do not report such findings. Corporate governance of banks in comparison to other subsectors effectively engages in utilizing the potential of intellectual capital efficiency. Agency theory and resource dependency theory find limited support as a result of this study. The GMM results are not robust to the alternative instruments.

Research limitations/implications

The sample size is small as the study is limited to the listed financial sector of Oman. Future studies can be extended to include all of Oman's or GCC’s listed companies. Additionally, the intellectual capital is measured using the construct of VAIC which suffers some limitations and can be overcome using other tools such as content analysis.

Practical implications

The findings of this study suggest that Oman's regulators can create an awareness strategy on highlighting the importance of intellectual capital for companies (board of directors and managers), investors, debtors and creditors. Further, Oman's Capital Market Authority and Muscat Securities Market need to strengthen the regulations related to intellectual capital.

Originality/value

This study extends intellectual capital and corporate governance literature by presenting the research outcome for Oman's financial sector. It is useful for Oman's financial sector companies to direct corporate governance measures for driving value creation of firms through the management of intellectual capital efficiency.

Details

Journal of Intellectual Capital, vol. 21 no. 6
Type: Research Article
ISSN: 1469-1930

Keywords

To view the access options for this content please click here
Article
Publication date: 19 October 2010

Fethi Calisir, Cigdem Altin Gumussoy, A. Elvan Bayraktaroğlu and Ece Deniz

The purpose of this paper is to apply Value Added Intellectual Coefficient (VAIC™) of Pulic to compare quoted information technology and communication companies on the…

Abstract

Purpose

The purpose of this paper is to apply Value Added Intellectual Coefficient (VAIC™) of Pulic to compare quoted information technology and communication companies on the Istanbul Stock Exchange (ISE), in terms of intellectual capital efficiency. This study also examines VAIC™, and its components' impact on company performance.

Design/methodology/approach

Multiple regression analysis was employed to identify the variables that significantly contribute to the company performance. Data required to calculate VAIC™ and its components were obtained from the 2005‐2007 annual reports and balance sheets of the companies.

Findings

As a whole, all the companies had a relatively higher human capital efficiency than structural and capital efficiencies. In 2007, Turkcell was the most efficient company based on VAIC™ assessment, while Link Bilgisayar and Plastikkart were the least efficient companies. Additionally, the results of the study revealed that factors such as human capital efficiency, firm leverage, and firm size, predicted profitability well. Among them, human capital efficiency had the highest impact. In addition, capital employed efficiency was found to be a significant predictor of both productivity and return on equity, and the only determinant of market valuation was the firm size.

Practical implications

This study allowed ITC companies to benchmark themselves according to the intellectual capital efficiencies and develop strategies to enhance their company's performance.

Originality/value

This study is the first that measures intellectual capital performance and its impact on the company performance of the quoted information technology and communication companies on the ISE.

Details

Journal of Intellectual Capital, vol. 11 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

To view the access options for this content please click here
Article
Publication date: 3 August 2021

Tamanna Dalwai and Mahdi Salehi

This research examines the influence of business strategy and intellectual capital on firm performance and bankruptcy risk of Oman's non-financial sector companies.

Abstract

Purpose

This research examines the influence of business strategy and intellectual capital on firm performance and bankruptcy risk of Oman's non-financial sector companies.

Design/methodology/approach

The data comprises 380 firm-year observations collected from 2015 to 2019 for the non-financial sector companies listed on the Muscat Securities Market. This study measures business strategy using the Miles and Snow typologies and Porter's strategies as alternative measures. The study uses the Granger-causality test to measure the bi-directional causality between independent and dependent variables. The authors use alternative measurements of business strategy and 2SLS/IV estimation to validate the OLS results.

Findings

According to the Miles and Snow typologies, most of Oman's non-financial firms were analyzers. The empirical results show a negative relationship between business strategy and return on equity (ROE), suggesting defender-type strategy leads to an increase in firm performance. The OLS results show no influence of A-VAIC on firm performance and Altman-Z score. The structural capital efficiency is positively associated with ROA, and Altman Z score consistent with the hypothesized relationship. The Granger causality test shows no inference of causality between any independent and dependent variables except for Z score and CEE.

Research limitations/implications

The business strategy results from the firm performance and bankruptcy risk models are valuable to the researchers from an emerging market and non-financial companies' perspective. Oman's diversification strategy of its economic activities through non-financial sector companies receives an impetus through the findings of this study. As this study is limited to Oman's non-financial sector companies, future research on business strategy impact can be extended to the financial sector, other GCC, and emerging countries.

Originality/value

The findings of this study contribute to the sparse literature on business strategy in an emerging market like Oman. This study enriches the knowledge of business strategy typologies proposed by Miles and Snow, and Porter. It also contributes to the extant literature on firm performance and bankruptcy risk.

Details

Asian Review of Accounting, vol. 29 no. 3
Type: Research Article
ISSN: 1321-7348

Keywords

To view the access options for this content please click here
Article
Publication date: 24 March 2021

Duc Hong Vo and Ngoc Phu Tran

For the past two decades, intellectual capital has played an increasingly important role in firm performance around the world. However, the importance of intellectual

Abstract

Purpose

For the past two decades, intellectual capital has played an increasingly important role in firm performance around the world. However, the importance of intellectual capital in Vietnam, and especially in the banking sector, has largely been ignored in the literature. This study is the first to examine the effect of intellectual capital on bank performance in Vietnam. In this paper, intellectual capital is decomposed into three components: (1) capital employed efficiency, (2) human capital efficiency and (3) structural capital efficiency.

Design/methodology/approach

The paper uses an unbalanced panel dataset on 14 listed banks in Vietnam for the period 2009–2018 for which required data are available, with the generalized method of moments.

Findings

The findings indicate that intellectual capital contributes significantly and positively to bank performance in Vietnam. In addition, bank performance is driven primarily by capital employed efficiency. Although human capital efficiency appears to contribute positively to bank performance, the effect on bank performance appears to be marginal.

Originality/value

The literature review indicates that the effect of intellectual capital on bank performance is mixed. This effect can be positive or negative or even show a U-shaped relationship. The effects of intellectual capital on firm performance are not consistent, depending on factors such as the quantitative technique and sample used. As such, this paper extends analysis of Vietnam to cover the 10-year period from 2009 to 2018. The literature review reveals that the contribution of intellectual capital to bank performance has largely been ignored in the context of Vietnam. Studies have been conducted on the Gulf countries, such as Buallay et al. (2020). However, because the context in Vietnam differs from that of the Gulf countries, their experience might not be relevant to Vietnam. Vietnam is an emerging market in Southeast Asia, whereas Gulf countries have high income levels. So, it is necessary to examine direct evidence on Vietnam.

Details

Managerial Finance, vol. 47 no. 8
Type: Research Article
ISSN: 0307-4358

Keywords

To view the access options for this content please click here
Article
Publication date: 22 July 2021

Tamanna Dalwai, Syeeda Shafiya Mohammadi, Gaitri Chugh and Mahdi Salehi

This study examines the impact of intellectual capital efficiency and corporate governance mechanisms on the annual report readability of Oman's financial sector companies.

Abstract

Purpose

This study examines the impact of intellectual capital efficiency and corporate governance mechanisms on the annual report readability of Oman's financial sector companies.

Design/methodology/approach

The study uses a sample of 150 firm-year observations of listed financial sector companies in the Muscat Securities Market, Oman, from 2014 to 2018. Flesch Reading ease and Flesch Kinkaid Index are used as proxies for annual report readability. As part of sensitivity analysis, the study also uses the natural logarithm of annual report pages as alternative readability measures. The investigation is conducted using random effects regression analysis and supported with system GMM estimation for robustness.

Findings

The findings of this study demonstrate a decrease in intellectual capital efficiency associated with better readability of annual reports for the financial sector firms. Alternatively, banks report a positive association of intellectual capital efficiency with the Flesch Reading ease score of the annual report. The structural capital and capital employed efficiency are also found to be negatively associated with annual report readability. Corporate governance mechanisms such as dispersed ownership and audit committee size also result in easy-to-read annual reports that support agency theory.

Research limitations/implications

The research was conducted for financial firms of Oman, and thereby the findings can be generalized to the financial sector of countries with similar settings, such as the Gulf Cooperation Council (GCC) region.

Practical implications

The policy implications arising from this study suggest a strengthening of the intellectual capital efficiency and corporate governance mechanisms to improve the readability of the firms and thereby increase investor confidence.

Originality/value

This paper's uniqueness is in the model used to investigate the impact of intellectual capital efficiency and corporate governance mechanisms on the annual report readability of an emerging market.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

1 – 10 of over 12000